As
filed with the Securities and Exchange Commission on August 22, 2019
Registration
No. 333- __________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
F-3
REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OF 1933
CHINA
INTERNET NATIONWIDE FINANCIAL SERVICES INC.
(Exact
name of registrant as specified in its charter)
(Translation of Registrant’s name
into English)
British
Virgin Islands
|
|
N/A
|
(State
or other jurisdiction of
incorporation or organization)
|
|
(I.R.S.
Employer
Identification Number)
|
93
Jianguo Road, No. 6 Building,
11th
Floor
Chaoyang
District, Beijing, People’s Republic of China 100020
Telephone:
+86 010-5820389
(Address
and telephone number of Registrant’s principal executive offices)
Mr.
Jianxin Lin, Chief Executive Officer
93
Jianguo Road, No. 6 Building,
11th
Floor
Chaoyang
District, Beijing, People’s Republic of China 100020
Telephone:
+86 010-5820389
(Name,
address, and telephone number of agent for service)
Copies
to:
Benjamin
Tan, Esq.
Sichenzia
Ross Ference, LLP
1185
Avenue of the Americas, 37th Floor,
New
York, NY 10036
+1-212-930-9700
– telephone
+1-212-930-9725
- facsimile
Approximate
date of commencement of proposed sale to the public: From time to time after the effective date of this registration statement
as determined by the registrant.
If
only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check
the following box. [ ]
If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933, check the following box. [X]
If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. [ ]
If
this Form is a post-effective amendment fled pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]
If
this Form is a registration statement pursuant to General Instruction I.C. or a post-effective amendment thereto that shall become
effective upon filing with the Commission pursuant to Rule 462(e) under the Securities Act, check the following box. [ ]
If
this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.C. filed to register
additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following
box. [ ]
Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of
1933.
Emerging
growth company [X]
If
an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards†
provided pursuant to Section 7(a)(2)(B) of the Securities Act. [ ]
†
The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting
Standards Board to its Accounting Standards Codification after April 5, 2012.
CALCULATION
OF REGISTRATION FEE
Title of each class of
securities to be
registered
|
|
Amount to be
registered(1)
|
|
|
Proposed
maximum
aggregate price
per share or
warrant(2)
|
|
|
Proposed
maximum
aggregate
offering price (3)
|
|
|
Amount of
registration fee(3)
|
|
Ordinary Shares, $0.001 par value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share Purchase Contracts and Share Purchase Units(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt Securities(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Warrants(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Units(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
$
|
50,000,000
|
|
|
$
|
6,060
|
|
(1)
|
There
are being registered hereunder such indeterminate number of the securities of each identified class being registered as may
be sold by the registrant from time to time at indeterminate prices, with the maximum aggregate public offering price not
to exceed $50,000,000.
|
(2)
|
The
proposed maximum aggregate price per unit of each class of securities will be determined from time to time by the registrant
in connection with the issuance by the registrant of the securities registered hereunder and is not specified as to each class
of securities pursuant to the General Instruction II.C. of Form F-3 under the Securities Act of 1933.
|
(3)
|
Estimated
solely for the purpose of calculating the registration fee pursuant to Rule 457(o) under the Securities Act of 1933. In no
event will the aggregate offering price of all securities sold by the registrant from time to time pursuant to this registration
statement exceed $50,000,000.
|
(4)
|
Share
purchase contracts to purchase ordinary shares or other securities registered hereunder. Share purchase contracts may be issued
separately or as share purchase units. Share purchase units may consist of a share purchase contract and debt securities,
warrants, other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities,
securing the holders’ obligations to purchase the securities under the share purchase contracts.
|
(5)
|
May
include senior or subordinated debt.
|
(6)
|
Warrants
may entitle the holder to purchase our ordinary shares, debt securities or any combination thereof. Warrants may be issued
independently or together with ordinary shares, and the warrants may be attached to or separate from such securities.
|
(7)
|
Rights
evidencing the right to purchase ordinary shares, or debt securities.
|
(8)
|
Each
unit may consist of one or more of the other securities described in this prospectus in any combination.
|
The
Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until
the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.
The
information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell
these securities and is not soliciting offers to buy these securities in any state where the offer or sale is not permitted.
Subject
to completion, dated August 22, 2019
CHINA
INTERNET NATIONWIDE FINANCIAL SERVICES, INC.
$50,000,000
Ordinary
Shares
Share
Purchase Contracts
Share
Purchase Units
Warrants
Debt
Securities
Rights
Units
We
may offer, from time to time, in one or more offerings, ordinary shares, share purchase contracts, share purchase units, warrants,
debt securities, rights or units, which we collectively refer to as the “securities”. The aggregate initial offering
price of the securities that we may offer and sell under this prospectus will not exceed $50,000,000. We may offer and sell any
combination of the securities described in this prospectus in different series, at times, in amounts, at prices and on terms to
be determined at, or prior to, the time of each offering. This prospectus describes the general terms of these securities and
the general manner in which these securities will be offered. We will provide the specific terms of these securities in supplements
to this prospectus. The prospectus supplements will also describe the specific manner in which these securities will be offered
and may also supplement, update or amend information contained in this prospectus. This prospectus may not be used to consummate
a sale of securities unless accompanied by the applicable prospectus supplement. You should read this prospectus and any applicable
prospectus supplement before you invest.
The
securities covered by this prospectus may be offered through one or more underwriters, dealers and agents or directly to purchasers.
The names of any underwriters, dealers or agents, if any, will be included in a supplement to this prospectus. For general information
about the distribution of securities offered, please see “Plan of Distribution”.
Our ordinary shares
issued pursuant to a registration statement on Form F-1 (No. 333-217326) are traded on the Nasdaq Global Market under the symbol
“CIFS”. On August 21, 2019, the closing price of our ordinary shares as reported by the Nasdaq Global Market
was $1.69 per ordinary share. As of August 21, 2019, the aggregate market value of our outstanding ordinary shares
held by non-affiliates using the closing price on the Nasdaq Global Market of $1.69 was approximately $12,800,377
based on 22,114,188 outstanding ordinary shares, of which approximately 7,574,188 ordinary shares were held by non-affiliates.
We have not offered any securities pursuant to General Instruction I.B.5 of Form F-3 during the prior 12 calendar month period
that ends on, and includes, the date of this prospectus.
This
prospectus may not be used to offer or sell our securities unless accompanied by a prospectus supplement. The information contained
or incorporated in this prospectus or in any prospectus supplement is accurate only as of the date of this prospectus, or such
prospectus supplement, as applicable, regardless of the time of delivery of this prospectus or any sale of our securities.
Investing
in our securities being offered pursuant to this prospectus involves a high degree of risk. You should carefully read and consider
the ‘‘Risk Factors’’ section of this prospectus and in the applicable prospectus supplement before you
make your investment decision.
Neither
the Securities and Exchange Commission, the Government of the British Virgin Islands (and any of its regulatory authorities),
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful
or complete. Any representation to the contrary is a criminal offense.
The
date of this prospectus is _______________, 2019
You
should rely only on the information contained or incorporated by reference in this prospectus or any prospectus supplement. We
have not authorized any person to provide you with different or additional information. If anyone provides you with different
or inconsistent information, you should not rely on it. This prospectus is not an offer to sell securities, and it is not soliciting
an offer to buy securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information
appearing in this prospectus or any prospectus supplement, as well as information we have previously filed with the SEC and incorporated
by reference, is accurate as of the date on the front of those documents only. Our business, financial condition, results of operations
and prospects may have changed since those dates.
ABOUT
THIS PROSPECTUS
This
prospectus is a part of a registration statement that we have filed with the SEC utilizing a “shelf” registration
process. Under this shelf registration process, we may sell any combination of the securities described in this prospectus in
one or more offerings up to an aggregate offering price of $50,000,000.
Each
time we sell securities, we will provide a supplement to this prospectus that contains specific information about the securities
being offered and the specific terms of that offering. The supplement may also add, update or change information contained in
this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should
rely on the prospectus supplement.
We
may offer and sell securities to, or through, underwriting syndicates or dealers, through agents or directly to purchasers. The
prospectus supplement for each offering of securities will describe in detail the plan of distribution for that offering.
In
connection with any offering of securities (unless otherwise specified in a prospectus supplement), the underwriters or agents
may over-allot or effect transactions which stabilize or maintain the market price of the securities offered at a higher level
than that which might exist in the open market. Such transactions, if commenced, may be interrupted or discontinued at any time.
See “Plan of Distribution.”
Please
carefully read both this prospectus and any prospectus supplement together with the documents incorporated herein by reference
under “Incorporation by Reference” and the additional information described below under “Where You Can Get More
Information.”
Prospective
investors should be aware that the acquisition of the securities described herein may have tax consequences. You should read the
tax discussion contained in the applicable prospectus supplement and consult your tax advisor with respect to your own particular
circumstances.
You
should rely only on the information contained or incorporated by reference in this prospectus and any prospectus supplement. We
have not authorized anyone to provide you with different information. The distribution or possession of this prospectus in or
from certain jurisdictions may be restricted by law. This prospectus is not an offer to sell these securities and is not soliciting
an offer to buy these securities in any jurisdiction where the offer or sale is not permitted or where the person making the offer
or sale is not qualified to do so or to any person to whom it is not permitted to make such offer or sale. The information contained
in this prospectus is accurate only as of the date of this prospectus and any information incorporated by reference is accurate
as of the date of the applicable document incorporated by reference, regardless of the time of delivery of this prospectus or
of any sale of the securities. Our business, financial condition, results of operations and prospects may have changed since those
dates.
Except
where the context otherwise requires and for purposes of this prospectus only, “we”, “us”, “our
company”, “Company”, “our”, “CIFS” refer to China Internet Nationwide Financial Services,
Inc., its subsidiaries, Hongkong Internet Financial Services Limited (“HKIFS”) and Beijing Yingxin Yijia Network Technology
Co., Ltd (“WFOE”) and CIFS (Xiamen) Financial Leasing Co., Ltd, in the context of describing our operations and consolidated
financial information, our consolidated affiliated entities in China, including but not limited to Sheng Ying Xin (Beijing) Management
Consulting Co., Ltd, Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd., Fu Hui (Shenzhen) Commercial Factoring Co., Ltd.,
Yingda Xincheng (Beijing) Insurance Broker Co., Ltd., Fuhui (Xiamen) Commercial Factoring Co., Ltd., Zhizhen Investment &
Research (Beijing) Information Consulting Co., Ltd. and Hangzhou Yuchuang Investment Partnership.
We
have relied on statistics provided by a variety of publicly-available sources regarding China’s expectations of growth.
We did not, directly or indirectly, sponsor or participate in the publication of such materials, and these materials are not incorporated
in this prospectus other than to the extent specifically cited in this prospectus. We have sought to provide current information
in this prospectus and believe that the statistics provided in this prospectus remain up-to-date and reliable, and these materials
are not incorporated in this prospectus other than to the extent specifically cited in this prospectus.
ABOUT
THE COMPANY
Overview
We
are in the business of providing financial advisory services to meet the financial and capital needs of our clients, which are
comprised largely of small-to-medium sized enterprises (“SMEs”). Through our wholly-owned subsidiaries, Hongkong
Internet Financial Services Limited (“HKIFS”) and Beijing Yingxin Yijia Network Technology Co., Ltd (“WFOE”)
and our contractually controlled and managed company, Sheng Ying Xin (Beijing) Management Consulting Co., Ltd (“Sheng Ying
Xin” or “SYX”) and its wholly-owned subsidiary, Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd. (“Kashgar
SYX”), we offer commercial payment advisory services, international corporate financing advisory services and intermediary
bank loan advisory services. Historically, we have also made direct loans to certain qualified borrowers. We do not anticipate
making any more direct loans but instead, we will be depositing our funds in trust accounts with certain bank lenders, who will,
in turn, make loans to borrowers.
We
generate revenues from service fees in connection with our (i) commercial payment advisory services, (ii) international corporate
financing advisory services, (iii) intermediary bank loan advisory services and (iv) factoring services. Additionally,
we earn some interest income from our direct or entrusted lending activities but we do not regard this a separate line of business
as returns from these (entrusted) loans are limited and infrequent.
Further
details concerning our business, including information with respect to our assets, operations and development history, are provided
in our Annual Report on Form 20-F and the other documents incorporated by reference into this prospectus. See “Documents
Incorporated by Reference.” You are encouraged to thoroughly review the documents incorporated by reference into this prospectus
as they contain important information concerning our business and our prospects.
We
are currently headquartered at 93 Jianguo Road, No. 6 Building, 11th Floor, Chaoyang District, Beijing, People’s Republic
of China 100020 and out telephone number is +86 010-5820389. Our registered agent in the British Virgin Islands is Start Incorp
Services Limited located at Start Chambers, Wickham’s Cay II, P.O. Box 2221, Road Town, Tortola, British Virgin Islands.
Below
is a chart illustrating our current corporate structure:
RISK
FACTORS
Investing
in our securities involves risks. Before investing in any securities offered pursuant to this prospectus, you should carefully
consider the risk factors and uncertainties set forth under the heading “Item 3.D. Risk Factors” in our Annual Report,
as amended, on Form 20-F for the year ended December 31, 2018, which is incorporated in this prospectus by reference, as updated
by our subsequent filings under the Exchange Act and, if applicable, in any accompanying prospectus supplement subsequently filed
relating to a specific offering or sale.
SPECIAL
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements. All statements contained in this prospectus other than statements of historical
fact, including statements regarding our future results of operations and financial position, our business strategy and plans,
and our objectives for future operations, are forward-looking statements. The words “believe,” “may,”
“will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,”
and similar expressions are intended to identify forward-looking statements. We have based these forward-looking statements largely
on our current expectations and projections about future events and trends that we believe may affect our financial condition,
results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. These
forward-looking statements are subject to a number of risks, uncertainties and assumptions, including those described in the “Risk
Factors” section. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time
to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business
or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained
in any forward-looking statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends
discussed in this prospectus may not occur and actual results could differ materially and adversely from those anticipated or
implied in the forward-looking statements.
You
should not rely upon forward-looking statements as predictions of future events. The events and circumstances reflected in the
forward-looking statements may not be achieved or occur. Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of activity, performance, or achievements. Except as required
by applicable law, we undertake no duty to update any of these forward-looking statements after the date of this prospectus or
to conform these statements to actual results or revised expectations.
EXCHANGE
RATE DATA
Our
financial information is presented in U.S. dollars. The functional currency of CIFS and HKFS is United States dollars (“US$”
or “$”). The functional currency of Yingxin Yijia, CIFS (Xiamen) Financial Leasing, Sheng Ying Xin and its subsidiaries
are Renminbi (“RMB”), and the PRC is the primary economic environment in which the Company operates.
Transactions
which are denominated in currencies other than the functional currency are converted into the functional currency
at the exchange rate at the dates of the transactions. Exchange gains and losses resulting from transactions denominated in a
currency other than functional currency are included in statements of operations as foreign currency transaction gains or losses.
Our financial statements have been translated into U.S. dollars in accordance with the Financial Accounting Standards
Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 830, “Foreign Currency Matters”.
For those entities which use RMB as its functional currency, the financial information is first prepared in RMB and then is translated
into U.S. dollars at period-end exchange rates as to assets and liabilities and average exchange rates as to revenue and expenses.
Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign
currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’
equity.
We
make no representation that any RMB or U.S. dollar amounts could have been, or could be, converted into U.S. dollars or RMB, as
the case may be, at any particular rate, or at all. The PRC government imposes control over its foreign currency reserves in part
through direct regulation of the conversion of RMB into foreign exchange and through restrictions on foreign trade. We do not
currently engage in currency hedging transactions.
The
following table sets forth information concerning exchange rates between the RMB and the U.S. dollar for the periods indicated.
(www.federalreserve.gov).
|
|
High
|
|
|
Low
|
|
|
Period End
|
|
|
Average
|
|
2013
|
|
|
6.2438
|
|
|
|
6.0537
|
|
|
|
6.0537
|
|
|
|
6.1478
|
|
2014
|
|
|
6.2591
|
|
|
|
6.0402
|
|
|
|
6.2046
|
|
|
|
6.1620
|
|
2015
|
|
|
6.4896
|
|
|
|
6.1870
|
|
|
|
6.4778
|
|
|
|
6.2827
|
|
2016
|
|
|
6.9580
|
|
|
|
6.4480
|
|
|
|
6.9430
|
|
|
|
6.6400
|
|
2017
|
|
|
6.9575
|
|
|
|
6.4773
|
|
|
|
6.5063
|
|
|
|
6.7569
|
|
2018
|
|
|
6.9737
|
|
|
|
6.2649
|
|
|
|
6.8755
|
|
|
|
6.6090
|
|
January
|
|
|
6.5263
|
|
|
|
6.2841
|
|
|
|
6.3990
|
|
|
|
6.4727
|
|
February
|
|
|
6.3471
|
|
|
|
6.2649
|
|
|
|
6.3280
|
|
|
|
6.3183
|
|
March
|
|
|
6.3565
|
|
|
|
6.2685
|
|
|
|
6.2726
|
|
|
|
6.3174
|
|
April
|
|
|
6.3340
|
|
|
|
6.2655
|
|
|
|
6.3325
|
|
|
|
6.2967
|
|
May
|
|
|
6.4175
|
|
|
|
6.3325
|
|
|
|
6.4096
|
|
|
|
6.3701
|
|
June
|
|
|
6.6235
|
|
|
|
6.3850
|
|
|
|
6.6171
|
|
|
|
6.4651
|
|
July
|
|
|
6.8102
|
|
|
|
6.6123
|
|
|
|
6.8038
|
|
|
|
6.7164
|
|
August
|
|
|
6.9330
|
|
|
|
6.8018
|
|
|
|
6.8300
|
|
|
|
6.8453
|
|
September
|
|
|
6.8880
|
|
|
|
6.8270
|
|
|
|
6.8680
|
|
|
|
6.8551
|
|
October
|
|
|
6.9737
|
|
|
|
6.8680
|
|
|
|
6.9737
|
|
|
|
6.9191
|
|
November
|
|
|
6.9558
|
|
|
|
6.8894
|
|
|
|
6.9558
|
|
|
|
6.9367
|
|
December
|
|
|
6.9077
|
|
|
|
6.8343
|
|
|
|
6.8755
|
|
|
|
6.8837
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
January
|
|
|
6.8708
|
|
|
|
6.6958
|
|
|
|
6.6958
|
|
|
|
6.7863
|
|
February
|
|
|
6.7907
|
|
|
|
6.6822
|
|
|
|
6.6912
|
|
|
|
6.7367
|
|
March
|
|
|
6.7381
|
|
|
|
6.6916
|
|
|
|
6.7112
|
|
|
|
6.7119
|
|
April
|
|
|
6.7418
|
|
|
|
6.6870
|
|
|
|
6.7347
|
|
|
|
6.7161
|
|
May
|
|
|
6.9182
|
|
|
|
6.7319
|
|
|
|
6.9027
|
|
|
|
6.8519
|
|
June
|
|
|
6.9298
|
|
|
|
6.8510
|
|
|
|
6.8650
|
|
|
|
6.8977
|
|
July
|
|
|
6.8927
|
|
|
|
6.8487
|
|
|
|
6.8833
|
|
|
|
6.5784
|
|
CAPITALIZATION
AND INDEBTNESS
Our
capitalization and indebtedness will be set forth in a prospectus supplement or in a report on Form 6-K subsequently furnished
to the SEC and specifically incorporated herein by reference.
USE
OF PROCEEDS
Unless
we otherwise indicate in a prospectus supplement, we currently intend to use the net proceeds from the sale of our securities
for general working capital.
More
detailed information regarding the use of proceeds from the sale of securities, including any determinable milestones at the applicable
time, will be described in any applicable prospectus supplement. We may also, from time to time, issue securities otherwise than
pursuant to a prospectus supplement to this prospectus.
DIVIDEND
POLICY
Our
dividend policy is set forth under the heading “Item 8.A. Consolidated Statements and Other Financial Information”
in our Annual Report, as amended, on Form 20-F for the year ended December 31, 2018, which is incorporated in this prospectus
by reference, as updated by our subsequent filings under the Exchange Act.
OFFER
AND LISTING DETAILS
We
may offer and issue from time to time ordinary shares, share purchase contracts, share purchase units, warrants, debt securities,
rights or units, or any combination thereof, up to an aggregate initial offering price of up to $50,000,000 in one or more transactions
under this shelf prospectus. The price of securities offered will depend on a number of factors that may be relevant at the time
of offer. See “Plan of Distribution.”
The
ordinary shares have been listed on the Nasdaq Global Market under the symbol “CIFS” since August 8, 2017.
The
following tables sets forth, for the periods indicated, the high and low trading prices of the ordinary shares as reported on
the Nasdaq Global Market prior to the filing of this prospectus.
Ordinary
Shares (symbol: “CIFS”)
Nasdaq
|
|
Market Price Per Share
|
|
|
|
High
|
|
|
Low
|
|
Quarterly:
|
|
|
|
|
|
|
August 8, 2017 – September 30, 2017
|
|
$
|
20.04
|
|
|
$
|
11.13
|
|
October 1, 2017 – December 31, 2017
|
|
$
|
61.00
|
|
|
$
|
20.85
|
|
January 1, 2018 – March 31, 2018
|
|
$
|
47.98
|
|
|
$
|
31.57
|
|
April 1, 2018 – June 30, 2018
|
|
$
|
34.85
|
|
|
$
|
14.95
|
|
July 1, 2018 – September 30, 2018
|
|
$
|
16.65
|
|
|
$
|
7.99
|
|
October 1, 2018 – December 31, 2018
|
|
$
|
8.55
|
|
|
$
|
0.635
|
|
January 1, 2019 – March 31, 2019
|
|
$
|
4.96
|
|
|
$
|
0.853
|
|
April 1, 2019 – June 30, 2019
|
|
$
|
3.76
|
|
|
$
|
1.28
|
|
July 1, 2019 – date of filing
|
|
$
|
2.20
|
|
|
$
|
1.65
|
|
DESCRIPTION
OF SHARES
Ordinary
Shares
China
Internet Nationwide Financial Services Inc. is a holding company incorporated under the laws of the British Virgin Islands
on September 28, 2015 under the BVI Business Companies Act, 2004 (the “BVI Act”) as a company limited by
shares.
Our
amended and restated memorandum and articles of association authorizes us to issue an unlimited number of shares of a single class
each with a par value of US$0.001 each. As of December 31, 2018, the date of our most recent balance sheet included in our financial
statements, there were 22,114,188 ordinary shares issued and outstanding. We issued a warrant to our underwriter to purchase 91,042
ordinary shares upon the successful completion of our initial public offering (“IPO”) at an exercise price of 120%
of the IPO price, namely $12 per share.
All
of our issued ordinary shares are fully paid and non-assessable. The Company may, but is not required to if the rules of the Nasdaq
Global Market allow, issue share certificates specifying the number of ordinary shares held by each holder of ordinary
shares in the Company. Our shareholders may freely hold and vote their ordinary shares.
Our
memorandum and articles of association permit the directors, by way of resolution of directors, to fix the emoluments of directors
with respect to services to be rendered in any capacity to the Company. All decisions about the compensation of directors will
be recommended by the compensation committee, and approved by way of resolution of directors of the Company.
The
following are summaries of the material provisions of our memorandum and articles of association and the BVI Act, insofar as they
relate to the material terms of our ordinary shares.
General
All
of our issued ordinary shares are fully paid and non-assessable. Each holder of ordinary shares is entitled to a certificate specifying
the number of ordinary shares held by him, her or it. Our shareholders may freely hold and vote their ordinary shares.
Transfer
Agent
Our
transfer agent for our ordinary shares is Transhare Securities Transfer and Registrar, 15500 Roosevelt Blvd., Suite 302, Clearwater,
FL 33760.
Memorandum
and Articles of Association
The
following discussion describes our amended and restated memorandum and articles of association that (subject to any limitations,
restrictions or modifications in our memorandum and articles of association; and subject to any rights or restrictions attaching
to any shares) will be in effect upon the completion of this offering:
Objects and Purposes,
Register, and Shareholders. Subject to the BVI Act and British Virgin Islands’ law (“BVI Law”), our
objects and purposes are unlimited. Our register of members will be maintained by our transfer agent, Transhare Securities
Transfer and Registrar. Under the BVI Act, a British Virgin Islands (“BVI”) company may treat the registered holder
of a share as the only person entitled to (a) exercise any voting rights attaching to the share, (b) receive notices, (c) receive
a distribution in respect of the share and (d) exercise other rights and powers attaching to the share. Consequently, as a matter
of BVI Law, where a shareholder’s shares are registered in the name of a nominee such as Cede & Co, the nominee is entitled
to receive notices, receive distributions and exercise rights in respect of any such shares registered in its name. The beneficial
owners of the shares registered in a nominee’s name will therefore be reliant on their contractual arrangements with the
nominee in order to receive notices and dividends and ensure the nominee exercises voting and other rights in respect of the shares
in accordance with their directions.
Directors’
Powers. Under the BVI Act, subject to any modifications or limitations in a company’s memorandum and articles of
association, a company’s business and affairs are managed by, or under the direction or supervision of, its directors; and
directors generally have all powers necessary to manage a company. A director must disclose any interest he has on any proposal,
arrangement or contract not entered into in the ordinary course of business and on usual terms and conditions. An interested director
may (subject to the memorandum and articles of association) vote on a transaction in which he has an interest. In accordance with,
and subject to, our memorandum and articles of association, the directors may by resolution of directors exercise all the powers
of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations whether
of the Company or of any third party.
Rights,
Preferences and Restrictions of Ordinary Shares. Our directors may (subject to the memorandum and articles of association
and BVI Law) authorize dividends at such time and in such amount as they determine. Each ordinary share is entitled to one vote
on any resolution of shareholders. In the event of a liquidation or dissolution of the Company, each ordinary share (subject to
the memorandum and articles of association) is entitled to an equal share in all surplus assets remaining available for distribution
to them after payment and discharge of all claims, debts, liabilities and obligations of the Company and after provision is made
for each class of shares (if any) having preference over the ordinary shares. There are no sinking fund provisions applicable
to our ordinary shares. Holders of our ordinary shares have no pre-emptive rights. Subject to the provisions of the BVI Act, we
may, (subject to the memorandum and articles of association) with the consent of the shareholder whose shares are to be
purchased , repurchase our ordinary shares in certain circumstances provided that the Company will, immediately after the repurchase,
satisfy the solvency test. The Company will satisfy the solvency test, if (i) the value of the Company’s assets exceeds
its liabilities; and (ii) the Company is able to pay its debts as they fall due.
In
accordance with the BVI Act:
|
(i)
|
the
Company may purchase, redeem or otherwise acquire its own shares in accordance with either (a) Sections 60, 61 and 62 of the
BVI Act (save to the extent that those Sections are negated, modified or inconsistent with provisions for the purchase, redemption
or acquisition of its own shares specified in the Company’s memorandum and articles of association); or (b) such other
provisions for the purchase, redemption or acquisition of its own shares as may be specified in the Company’s memorandum
and articles of association. The Company’s memorandum and articles of association provide that such Sections 60, 61
and 62 do not apply to the Company; and
|
|
(ii)
|
where
a company may purchase, redeem or otherwise acquire its own shares otherwise than in accordance with Sections 60, 61 and 62
of the BVI Act, it may not purchase, redeem or otherwise acquire the shares without the consent of the member whose shares
are to be purchased, redeemed or otherwise acquired, unless the Company is permitted by the memorandum and articles of association
to purchase, redeem or otherwise acquire the shares without that consent; and
|
|
(iii)
|
unless
the shares are held as treasury shares in accordance with Section 64 of the BVI Act, any shares acquired by the Company are
deemed to be cancelled immediately on purchase, redemption or other acquisition.
|
Variation
of the Rights of Shareholders. As permitted by the BVI Act and our memorandum and articles of association, the rights
conferred upon the holders of the shares of any class of the Company may (subject to the memorandum and articles of association)
only be varied, whether or not the Company is in liquidation, with the consent in writing of the holders of a majority of the
issued shares of that class or by a resolution approved at a duly convened and constituted meeting of the shares of that class
by the affirmative vote of a majority of the shares of that class which were present at the meeting and were voted, except where
a different majority is required under our memorandum and articles of association or the BVI Act. A greater majority is required
in relation to a scheme of arrangement and may be required in relation to a plan of arrangement.
Shareholder
Meetings. In accordance with, and subject to, our memorandum and articles of association, (a) any director of the Company
may convene meetings of the shareholders at such times as the director considers necessary or desirable (and the director convening
a meeting of shareholders may fix as the record date for determining those shareholders that are entitled to vote at the meeting
the date notice is given of the meeting, or such other date as may be specified in the notice, being a date not earlier than the
date of the notice); and (b) upon the written request of shareholders entitled to exercise 30% or more of the voting rights in
respect of the matter for which the meeting is requested, the directors shall convene a meeting of shareholders. Under BVI Law,
the memorandum and articles of association may be amended to decrease but not increase the required percentage to call a meeting
above 30%. In accordance with, and subject to, our memorandum and articles of association, (a) the director convening a meeting
shall give not less than 7 days’ notice of a meeting of shareholders to those shareholders whose names on the date the notice
is given appear as shareholders in the register of members of the Company and are entitled to vote at the meeting; and the other
directors; (b) a meeting of shareholders held in contravention of the requirement to give notice is valid if shareholders holding
at least 90% of the total voting rights on all the matters to be considered at the meeting have waived notice of the meeting and,
for this purpose, the presence of a shareholder at the meeting shall constitute waiver in relation to all of the shares that that
shareholder holds; (c) a meeting of shareholders is duly constituted if, at the commencement of the meeting, there are present
in person or by proxy not less than 50%of the votes of the shares entitled to vote on resolutions of shareholders to be considered
at the meeting; and (d) if within two hours from the time appointed for the meeting a quorum is not present, the meeting, if convened
upon the request of the shareholders, shall be dissolved; in any other case it shall stand adjourned to the next business day
in the jurisdiction in which the meeting was to have been held at the same time and place or to such other time and place as the
directors may determine, and if at the adjourned meeting there are present within one hour from the time appointed for the meeting
in person or by proxy not less than one third of the votes of the shares entitled to vote on the matters to be considered by the
meeting, those present shall constitute a quorum but otherwise the meeting shall be dissolved.
Dividends.
Subject to the BVI Act and our memorandum and articles of association, the directors of the Company may, by resolution
of directors, authorize a distribution by way of dividend at a time and amount as they think fit if they are satisfied, based
on reasonable grounds, that, immediately after distribution of the dividend, the value of our assets will exceed our liabilities
and we will be able to pay our debts as they fall due. There is no further BVI Law restriction on the amount of funds which may
be distributed by us by dividend, including all amounts paid by way of the subscription price for ordinary shares regardless of
whether such amounts may be wholly or partially treated as share capital or share premium under certain accounting principles.
Shareholder approval is not (except as otherwise provided in our memorandum articles of association) required to pay dividends
under BVI Law. In accordance with, and subject to, our memorandum and articles of association, no dividend shall bear interest
as against the Company (except as otherwise provided in our memorandum articles of association).
Disclosure
of the Securities and Exchange Commission’s Position on Indemnification for Securities Act Liabilities. Insofar
as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling
the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Transfer
of Shares. Subject to any applicable restrictions or limitations arising pursuant to (i) our memorandum and articles of
association; or (ii) the BVI Act, any of our shareholders may transfer all or any of his or her shares by an instrument of transfer
in the usual or common form or in any other form which our directors may approve (such instrument of transfer being signed by
the transferor and containing the name and address of the transferee). The BVI Act also provides that the shares of the Company,
whilst listed on a recognized exchange such as the Nasdaq Global Market, may be transferred without the need for a written
instrument of transfer if the transfer is carried out within the laws, rules, procedures and other requirements applicable to
shares registered on the recognized exchange and subject to the Company’s memorandum and articles of association
and the Listed Companies and Funds Regulations of the British Virgin Islands. There are currently no provisions of the Listed
Companies and Funds Regulations in force that would affect this. Our memorandum and articles of association also (save as otherwise
provided therein) provide that shares may be dealt with by means of a system utilized for the purposes of holding and transferring
of shares in uncertificated form.
Summary
of Certain Significant Provisions of BVI Law
The
BVI Act differs from laws applicable to US corporations and their shareholders. Set forth below is a summary of certain significant
provisions of the BVI Act applicable to us (save to the extent that such provisions have been, to the extent permitted under the
BVI Act, negated or modified in our memorandum and articles of association in accordance with the BVI Act).
Mergers,
Consolidations and Similar Arrangements. The BVI Act provides for mergers as that expression is understood under US corporate
law. Common law mergers are also permitted outside of the scope of the BVI Act. Under the BVI Act, two or more companies may either
merge into one of such existing companies, or the surviving company, or consolidate with both existing companies ceasing to exist
and forming a new company, or the consolidated company. The procedure for a merger or consolidation between the Company and another
company (which need not be a BVI company, and which may be the Company’s parent, but need not be) is set out in the BVI
Act. The directors of the BVI company or BVI companies which are to merge or consolidate must approve a written plan of merger
or consolidation which must also be authorized by a resolution of members (and the outstanding shares of every class of shares
that are entitled to vote on the merger or consolidation as a class if the memorandum articles of association so provide or if
the plan of merger or consolidation contains any provisions that, if contained in a proposed amendment to the memorandum and articles
of association, would entitle the class to vote on the proposed amendment as a class) of the shareholders of the BVI company or
BVI companies which are to merge. A foreign company which is able under the laws of its foreign jurisdiction to participate in
the merger or consolidation is required by the BVI Act to comply with the laws of that foreign jurisdiction in relation to the
merger or consolidation. The Company must then execute articles of merger or consolidation, containing certain prescribed details.
The plan and articles of merger or consolidation are then filed with the Registrar of Corporate Affairs in the BVI, or the Registrar.
If the surviving company or the consolidated company is to be incorporated under the laws of a jurisdiction outside BVI, it shall
file the additional instruments required under Section 174(2)(b) of the BVI Act. The Registrar then (if he is satisfied that the
requirements of the BVI Act have been complied with) registers, in the case of a merger, the articles of merger or consolidation
and any amendment to the memorandum and articles of association of the surviving company and, in the case of a consolidation,
the memorandum and articles of association of the new consolidated company and issues a certificate of merger or consolidation
(which is conclusive evidence of compliance with all requirements of the BVI Act in respect of the merger or consolidation). The
merger or consolidation is effective on the date that the articles of merger or consolidation are registered by the Registrar
or on such subsequent date, not exceeding thirty days, as is stated in the articles of merger or consolidation but if the surviving
company or the consolidated company is a company incorporated under the laws of a jurisdiction outside the BVI, the merger or
consolidation is effective as provided by the laws of that other jurisdiction.
As
soon as a merger or consolidation becomes effective (inter alia), (a) the surviving company or consolidated company (so far as
is consistent with its amended memorandum and articles, as amended or established by the articles of association of merger or
consolidation) has all rights, privileges, immunities, powers, objects and purposes of each of the constituent companies; (b)
the memorandum and articles of association of any surviving company are automatically amended to the extent, if any, that changes
to its amended memorandum and articles of association are contained in the articles of merger; (c) assets of every description,
including choses-in-action and the business of each of the constituent companies, immediately vest in the surviving company or
consolidated company; (d) the surviving company or consolidated company is liable for all claims, debts, liabilities and obligations
of each of the constituent companies; (e) no conviction, judgment, ruling, order, claim, debt, liability or obligation due or
to become due, and no cause existing, against a constituent company or against any shareholder, director, officer or agent thereof,
is released or impaired by the merger or consolidation; and (f) no proceedings, whether civil or criminal, pending at the time
of a merger or consolidation by or against a constituent company, or against any shareholder, director, officer or agent thereof,
are abated or discontinued by the merger or consolidation, but: (i) the proceedings may be enforced, prosecuted, settled or compromised
by or against the surviving company or consolidated company or against the shareholder, director, officer or agent thereof, as
the case may be or (ii) the surviving company or consolidated company may be substituted in the proceedings for a constituent
company but if the surviving company or the consolidated company is incorporated under the laws of a jurisdiction outside the
BVI, the effect of the merger or consolidation is the same as noted previously except in so far as the laws of the other
jurisdiction otherwise provide.
The
Registrar shall strike off the register of companies each constituent company that is not the surviving company in the case of
a merger and all constituent companies in the case of a consolidation (save that this shall not apply to a foreign company).
If
the directors determine it to be in the best interests of the Company, it is also possible for a merger to be approved as a court
approved plan of arrangement or as a scheme of arrangement in accordance with (in each such case) the BVI Act. The convening of
any necessary shareholders meetings and subsequently the arrangement must be authorized by the BVI court. A scheme of arrangement
requires the approval of 75% of the votes of the shareholders or class of shareholders, as the case may be. If the effect of the
scheme is different in relation to different shareholders, it may be necessary for them to vote separately in relation to the
scheme, with it being required to secure the requisite approval level of each separate voting group. Under a plan of arrangement,
a BVI court may determine what shareholder approvals are required and the manner of obtaining the approval.
Continuation
into a Jurisdiction Outside the BVI. In accordance with, and subject to, our memorandum and articles of association, the
Company may by resolution of shareholders or by a resolution passed unanimously by all directors of the Company continue as a
company incorporated under the laws of a jurisdiction outside the BVI in the manner provided under those laws. The Company does
not cease to be a BVI company unless the foreign law permits continuation and the BVI company has complied with the requirements
of that foreign law. Where a company that wishes to continue as a company incorporated under the laws of a jurisdiction outside
the BVI has a charge registered in respect of the property of the company undersection 163 of the BVI Act which has not been released
or satisfied, it shall, before continuing and provided that the charge does not contain a covenant prohibiting continuation of
the company outside the BVI, provide a written declaration addressed to the Registrar specifying that: (a) a notice of satisfaction
or release in respect of the charge has been filed and registered under section 165 of the BVI Act; (b) where paragraph (a) has
not been complied with, the chargee to whom the registered charge relates has been notified in writing of the intention to continue
the company as a company incorporated under the laws of a jurisdiction outside the BVI and the chargee has given his or her consent
or has not objected to the continuation; or (c) where paragraph (a) has not been satisfied and the chargee, after notification
under paragraph (b), has not given his or her consent or objected to the continuation, the chargee’s interest secured by
the registered charge shall not be diminished or in any way compromised by the continuation and the charge shall operate as a
liability of the continued company incorporated under the laws of a jurisdiction outside of the BVI. Where a company is continued
under the laws of a jurisdiction outside the BVI, (a) the company continues to be liable for all of its claims, debts, liabilities
and obligations that existed prior to its continuation, (b) no conviction, judgment, ruling, order, claim, debt, liability or
obligation due or to become due, and no cause existing, against the company or against any shareholder, director, officer or agent
thereof, is released or impaired by its continuation as a company under the laws of the jurisdiction outside the BVI, (c) no proceedings,
whether civil or criminal, pending by or against the company, or against any shareholder, director, officer or agent thereof,
are abated or discontinued by its continuation as a company under the laws of the jurisdiction outside the BVI, but the proceedings
may be enforced, prosecuted, settled or compromised by or against the Company or against the shareholder, director, officer or
agent thereof, as the case may be; and (d) service of process may continue to be effected on the registered agent of the company
in the BVI in respect of any claim, debt, liability or obligation of the Company during its existence as a company under the BVI
Act.
Directors.
In accordance with, and subject to, our memorandum and articles of association (including, for the avoidance of any doubt,
any rights or restrictions attaching to any ordinary shares), (a) the directors are elected by resolution of shareholders or by
resolution of directors for such term as the shareholders or directors determine; (b) each director holds office for the term,
if any, fixed by the resolution of shareholders or resolution of directors appointing him, or until his earlier death, resignation
or removal. If no term is fixed on the appointment of a director, the director serves indefinitely until his earlier death, resignation
or removal: (c) a director may be removed from office (i) with or without cause, by a resolution of shareholders passed at a meeting
of shareholders called for the purposes of removing the director or for purposes including the removal of the director or by a
written resolution passed by a least 75% of the shareholders of the Company entitled to vote or (ii) with cause, by a resolution
of directors passed at a meeting of directors called for the purpose of removing the director or for purposes including the removal
of the director; (d) a director may resign his office by giving written notice of his resignation to the Company and the resignation
has effect from the date the notice is received by the Company or from such later date as may be specified in the notice and a
director shall resign forthwith as a director if he is, or becomes, disqualified from acting as a director under the BVI Act;
(e) the directors may at any time appoint any person to be a director either to fill a vacancy or as an addition to the existing
directors and where the directors appoint a person as director to fill a vacancy, the term shall not exceed the term that remained
when the person who has ceased to be a director ceased to hold office; (f) a vacancy in relation to directors occurs if a director
dies or otherwise ceases to hold office prior to the expiration of his term of office; and (g) a director is not required to hold
shares in the Company as a qualification to office.
In
accordance with, and subject to, our memorandum and articles of association, (a) any one director of the Company may call a meeting
of the directors by sending a written notice to each other director; (b) the directors of the Company or any committee thereof
may meet at such times and in such manner as the directors may determine to be necessary or desirable; (c) a director shall be
given not less than 3 days’ notice of meetings of directors, but a meeting of directors held without 3 days’ notice
having been given to all directors shall be valid if all the directors entitled to vote at the meeting who do not attend waive
notice of the meeting, and for this purpose the presence of a director at a meeting shall constitute waiver by that director and
the inadvertent failure to give notice of a meeting to a director, or the fact that a director has not received the notice, does
not invalidate the meeting; (d) a meeting of directors is duly constituted for all purposes if at the commencement of the meeting
there are present in person or by alternate not less than one-half of the total number of directors, unless there are only 2 directors
in which case the quorum is two; (e) a director may by a written instrument appoint an alternate who need not be a director and
the alternate shall be entitled to attend meetings in the absence of the director who appointed him and to vote or consent in
place of the director until the appointment lapses or is terminated; (f) a resolution of directors is passed if either (i) the
resolution is approved at a duly convened and constituted meeting of directors of the Company or of a committee of directors of
the Company by the affirmative vote of a majority of the directors present at the meeting who voted except that where a director
is given more than one vote, he shall be counted by the number of votes he casts for the purpose of establishing a majority; or
(ii) the resolution is consented to in writing by a majority of directors or by a majority of members of a committee of directors
of the Company, as the case may be, unless (in either case) the BVI Act or our memorandum and articles of association require
a different majority.
Indemnification
of Directors. In accordance with, and subject to, our memorandum and articles of association (including the limitations
detailed therein), the Company shall indemnify against all expenses, including legal fees, and against all judgments, fines and
amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person
who (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil,
criminal, administrative or investigative, by reason of the fact that the person is or was a director of the Company; or (b) is
or was, at the request of the Company, serving as a director of, or in any other capacity is or was acting for, another company
or a partnership, joint venture, trust or other enterprise.
In
accordance with, and subject to, our memorandum and articles of association (including the limitations detailed therein), (a)
the indemnity referred to above only applies if the person acted honestly and in good faith with a view to the best interests
of the Company and, in the case of criminal proceedings, the person had no reasonable cause to believe that their conduct was
unlawful; (b) the decision of the directors as to whether the person acted honestly and in good faith and with a view to the best
interests of the Company and as to whether the person had no reasonable cause to believe that his conduct was unlawful is, in
the absence of fraud, sufficient for the purposes of the articles of association, unless a question of law is involved; and (c)
the termination of any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not,
by itself, create a presumption that the person did not act honestly and in good faith and with a view to the best interests of
the Company or that the person had reasonable cause to believe that his conduct was unlawful.
In
accordance with, and subject to, our memorandum and articles of association, the Company may purchase and maintain insurance in
relation to any person who is or was a director, officer or liquidator of the Company, or who at the request of the Company is
or was serving as a director, officer or liquidator of, or in any other capacity is or was acting for, another company or a partnership,
joint venture, trust or other enterprise, against any liability asserted against the person and incurred by the person in that
capacity, whether or not the Company has or would have had the power to indemnify the person against the liability as provided
in the articles of association.
Directors
and Conflicts of Interest. As noted above, pursuant to the BVI Act and the Company’s memorandum and articles of
association, a director of a company who has an interest in a transaction and who has declared such interest to the other directors,
may:
|
(a)
|
vote
on a matter relating to the transaction;
|
|
|
|
|
(b)
|
attend
a meeting of directors at which a matter relating to the transaction arises and be included among the directors present at
the meeting for the purposes of a quorum; and
|
|
|
|
|
(c)
|
sign
a document on behalf of the Company, or do any other thing in his capacity as a director, that relates to the transaction,
|
and,
subject to compliance with the BVI Act shall not, by reason of his office be accountable to the Company for any benefit which
he derives from such transaction and no such transaction shall be liable to be avoided on the grounds of any such interest or
benefit.
In
accordance with, and subject to, our memorandum and articles of association, (a) a director of the Company shall, forthwith after
becoming aware of the fact that he is interested in a transaction entered into or to be entered into by the Company, disclose
the interest to all other directors of the Company; and (b) for the purposes noted foregoing, a disclosure to all other directors
to the effect that a director is a member, director or officer of another named entity or has a fiduciary relationship with respect
to the entity or a named individual and is to be regarded as interested in any transaction which may, after the date of the entry
or disclosure, be entered into with that entity or individual, is a sufficient disclosure of interest in relation to that transaction.
Shareholders’
Suits. The enforcement of the Company’s rights will ordinarily be a matter for its directors.
In
certain circumstances, a shareholder has the right to seek various remedies against the Company in the event the directors are
in breach of their duties under the BVI Act. Pursuant to Section 184B of the BVI Act, if a company or director of a company engages,
proposes to engage in, or has engaged in conduct that contravenes the provisions of the BVI Act or the memorandum and articles
of association of the Company, the BVI court may, on application of a shareholder or director of the Company, make an order directing
the Company or director to comply with, or restraining the Company or director from engaging in conduct that contravenes, the
BVI Act or the memorandum and articles of association.
Furthermore,
pursuant to Section 184I(1) of the BVI Act a shareholder of a company who considers that the affairs of the Company have been,
are being or are likely to be, conducted in a manner that is, or any acts of the Company have been, or are likely to be oppressive,
unfairly discriminatory, or unfairly prejudicial to him in that capacity, may apply to the BVI court for an order which, inter
alia, can require the Company or any other person to pay compensation to the shareholder.
The
BVI Act provides for a series of remedies available to shareholders. Where a company incorporated under the BVI Act conducts some
activity which contravenes the BVI Act or the Company’s memorandum and articles of association, the court can issue a restraining
or compliance order. Under Section 184G of the BVI Act, a shareholder of a company may bring an action against the Company for
breach of a duty owed by the Company to him as a shareholder. A shareholder also pursuant to Section 184C of the BVI Act may,
with the leave of the BVI court, bring proceedings or intervene in proceedings in the name of the Company, in certain circumstances.
Such actions are known as derivative actions. The BVI court may only grant leave to bring a derivative action where it is satisfied
that:
|
●
|
the
Company does not intend to bring, diligently continue or defend or discontinue proceedings; and
|
|
|
|
|
●
|
it
is in the interests of the Company that the conduct of the proceedings not be left to the directors or to the determination
of the shareholders as a whole.
|
When
considering whether to grant leave, the BVI court is also required to have regard to the following matters:
|
●
|
whether
the shareholder is acting in good faith;
|
|
|
|
|
●
|
whether
a derivative action is in the Company’s interests, taking into account the directors’ views on
commercial
matters;
|
|
|
|
|
●
|
whether
the proceedings are likely to succeed;
|
|
|
|
|
●
|
the
costs of the proceedings in relation to the relief likely to be obtained; and
|
|
|
|
|
●
|
whether
an alternative remedy to the derivative claim is available.
|
Any
shareholder of a company may apply to the BVI court under the Insolvency Act, 2003 of the BVI, or the Insolvency Act, for the
appointment of a liquidator to liquidate the Company and the court may appoint a liquidator for the Company if it is of the opinion
that it is just and equitable to do so.
Appraisal
Rights. The BVI Act provides that any shareholder of a company is entitled to payment of the fair value of his shares
upon dissenting from any of the following: (a) a merger if the company is a constituent company, unless the company is the surviving
company and the shareholder continues to hold the same or similar shares; (b) a consolidation, if the company is a constituent
company; (c) any sale, transfer, lease, exchange or other disposition of more than 50% in value of the assets or business of the
company if not made in the usual or regular course of the business carried on by the company but not including: (i) a disposition
pursuant to an order of the court having jurisdiction in the matter, (ii) a disposition for money on terms requiring all or substantially
all net proceeds to be distributed to the shareholders in accordance with their respective interests within one year after the
date of disposition, or (iii) a transfer pursuant to the power of the directors to transfer assets for the protection thereof;
(d) a compulsory redemption of 10% or fewer of the issued shares of the company required by the holders of 90% or more of the
votes of the outstanding shares of the company pursuant to the terms of Section 176 of the BVI Act; and (e) an arrangement, if
permitted by the BVI court.
Generally,
any other claims against a company by its shareholders must
be based on the general laws of contract or tort applicable in the BVI or their individual rights as shareholders as established
by the company’s memorandum and articles of association. There are common law rights for the protection of shareholders
that may be invoked, largely derived from English common law. For example, under the rule established in the English case known
as Foss v. Harbottle, a court will generally refuse to interfere with the management of a company at the insistence of a minority
of its shareholders who express dissatisfaction with the conduct of the company’s affairs by the majority or the board of
directors. However, every shareholder is entitled to seek to have the affairs of the company conducted properly according to law
and the constituent documents of the Company. As such, if those who control the Company have persistently disregarded the requirements
of company law or the provisions of the company’s memorandum and articles of association, then the courts may grant relief.
Generally, the areas in which the courts will intervene are the following:
|
●
|
a
company is acting or proposing to act illegally or beyond the scope of its authority;
|
|
|
|
|
●
|
the
act complained of, although not beyond the scope of the authority, could only be effected if duly authorized by more than
the number of votes which have actually been obtained;
|
|
|
|
|
●
|
the
individual rights of the plaintiff shareholder have been infringed or are about to be infringed; or
|
|
|
|
|
●
|
those
who control the Company are perpetrating a “fraud on the minority.”
|
Share
Repurchases and Redemptions. As permitted by the BVI Act and subject to our memorandum and articles of association, shares
may be repurchased, redeemed or otherwise acquired by us by resolution of directors and with the consent of the shareholder whose
shares are being purchased. Depending on the circumstances of the redemption or repurchase, our directors may need to determine
that, immediately following the redemption or repurchase, we will be able to satisfy our debts as they fall due and the value
of our assets exceeds our liabilities. Our directors may only exercise this power on our behalf, subject to the BVI Act, our memorandum
and articles of association and to any applicable requirements imposed from time to time by the SEC, the Nasdaq Global Market
or any other stock exchange on which our securities are listed.
Inspection
of Books and Records. Under the BVI Act, members of the general public, on payment of a nominal fee, can obtain copies
of the public records of a company available at the office of the Registrar, including the Company’s certificate of incorporation,
its memorandum and articles of association (with any amendments thereto), records of license fees paid to date, any articles of
dissolution, any articles of merger, and a register of charges created by the Company (if the Company has elected to file such
a register or an applicable chargee has caused the same to be filed).
A
shareholder of a company is entitled, on giving written notice to the Company, to inspect:
|
(a)
|
the
memorandum and articles of association;
|
|
|
|
|
(b)
|
the
register of members;
|
|
|
|
|
(c)
|
the
register of directors; and
|
|
|
|
|
(d)
|
the
minutes of meetings and resolutions of shareholders and of those classes of shares of which he is a shareholder.
|
In
addition, a shareholder may make copies of or take extracts from the documents and records referred to in (a) through (d) above.
However, subject to the memorandum and articles of association of the Company, the directors may, if they are satisfied that it
would be contrary to the Company’s interests to allow a shareholder to inspect any document, or part of any document, specified
in (b), (c) or (d) above, refuse to permit the shareholder to inspect the document or limit the inspection of the document, including
limiting the making of copies or the taking of extracts from the records. Where a company fails or refuses to permit a shareholder
to inspect a document or permits a shareholder to inspect a document subject to limitations, that shareholder may apply to the
BVI court for an order that he should be permitted to inspect the document or to inspect the document without limitation.
Our
registered agent is Start Incorp Services Limited of Start Chambers, Wickham’s Cay II,P.O. Box 2221, Road Town, Tortola,
British Virgin Islands. A company is required to keep a copy of its register of members and register of directors at the offices
of its registered agent in the BVI, and the Company is required to notify any changes to the originals of such registers (assuming
the originals are held elsewhere) to the registered agent, in writing, within 15 days of any change; and to provide the registered
agent with a written record of the physical address of the place or places at which the original register of members or the original
register of directors is kept.
Where
the place at which the original register of members or the original register of directors of the Company is changed, the Company
must provide the registered agent with the physical address of the new location of the records within 14 days of the change of
location.
A
company is also required to keep at the office of its registered agent or at such other place or places, within or outside the
BVI, as the directors may determine the minutes of meetings and resolutions of shareholders and of classes of shareholders; and
the minutes of meetings and resolutions of directors and committees of directors. If such records are kept at a place other than
at the office of the Company’s registered agent, the Company is required to provide the registered agent with a written
record of the physical address of the place or places at which the records are kept and to notify the registered agent, within
14 days, of the physical address of any new location where such records may be kept.
Dissolution;
Winding Up. As permitted by the BVI Act and subject to our memorandum and articles of association, we may be voluntarily
liquidated and dissolved under Part XII of the BVI Act by resolution of directors and resolution of shareholders if we have no
liabilities or we are able to pay our debts as they fall due and the value of our assets equals or exceeds our liabilities.
We
also may be wound up and dissolved in circumstances where we are insolvent in accordance with the terms of the Insolvency Act.
Anti-Money
Laundering Laws. In order to comply with legislation and regulations aimed at the prevention of money laundering we are
required to adopt and maintain anti-money laundering procedures, and may require subscribers to provide evidence to verify their
identity. Where permitted, and subject to certain conditions, we also may delegate the maintenance of our anti-money laundering
procedures (including the acquisition of due diligence information) to a suitable person. We reserve the right to request such
information as is necessary to verify the identity of a subscriber. In the event of delay or failure on the part of the subscriber
in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds
received will be returned without interest to the account from which they were originally debited.
If
any person resident in the BVI knows or suspects that another person is engaged in money laundering or terrorist financing and
the information for that knowledge or suspicion came to his or her attention in the course of his or her business the person will
be required to report his belief or suspicion to the Financial Investigation Agency of the BVI, pursuant to the Proceeds of Criminal
Conduct Act 1997 (as amended). Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure
of information imposed by any enactment or otherwise.
Exchange
controls. We know of no BVI laws, decrees, regulations or other legislation that limit the import or export of capital
or the payment of dividends to shareholders who do not reside in the BVI.
DESCRIPTION
OF WARRANTS
The
following description, together with the additional information we may include in any applicable prospectus supplements, summarizes
the material terms and provisions of the warrants that we may offer under this prospectus and the related warrant agreements and
warrant certificates. While the terms summarized below will apply generally to any warrants that we may offer under this prospectus,
we will describe the particular terms of any series of warrants that we may offer in more detail in the applicable prospectus
supplement. If we indicate in the prospectus supplement, the terms of any warrants offered under that prospectus supplement may
differ from the terms described below. However, no prospectus supplement shall fundamentally change the terms that are set forth
in this prospectus or offer a security that is not registered and described in this prospectus at the time of its effectiveness.
Specific warrant agreements will contain additional important terms and provisions and will be incorporated by reference as an
exhibit to the registration statement that includes this prospectus or as an exhibit to a report filed under the Exchange Act.
General
We
may issue warrants that entitle the holder to purchase ordinary shares, debt securities or any combination thereof. We may issue
warrants independently or together with ordinary shares, debt securities or any combination thereof, and the warrants may be attached
to or separate from these securities.
We
will describe in the applicable prospectus supplement the terms of the series of warrants, including:
|
●
|
the
offering price and aggregate number of warrants offered;
|
|
●
|
the
currency for which the warrants may be purchased, if not United States dollars;
|
|
●
|
if
applicable, the designation and terms of the securities with which the warrants are issued and the number of warrants issued
with each such security or each principal amount of such security;
|
|
●
|
if
applicable, the date on and after which the warrants and the related securities will be separately transferable;
|
|
●
|
in
the case of warrants to purchase ordinary shares, the number of ordinary shares purchasable upon the exercise of one warrant
and the price at which these shares may be purchased upon such exercise;
|
|
●
|
in
the case of warrants to purchase debt securities, the principal amount of debt securities purchasable upon exercise of one
warrant and the price at, and currency, if not United States dollars, in which, this principal amount of debt securities may
be purchased upon such exercise;
|
|
●
|
the
effect of any merger, consolidation, sale or other disposition of our business on the warrant agreement and the warrants;
|
|
●
|
the
terms of any rights to redeem or call the warrants;
|
|
●
|
any
provisions for changes to or adjustments in the exercise price or number of securities issuable upon exercise of the warrants;
|
|
●
|
the
dates on which the right to exercise the warrants will commence and expire;
|
|
●
|
the
manner in which the warrant agreement and warrants may be modified;
|
|
●
|
federal
income tax consequences of holding or exercising the warrants;
|
|
●
|
the
terms of the securities issuable upon exercise of the warrants; and
|
|
●
|
any
other specific terms, preferences, rights or limitations of or restrictions on the warrants.
|
Before
exercising their warrants, holders of warrants will not have any of the rights of holders of the securities purchasable upon such
exercise, including:
|
●
|
in
the case of warrants to purchase debt securities, the right to receive payments of principal of, or premium, if any, or interest
on, the debt securities purchasable upon exercise or to enforce covenants in the applicable indenture; or
|
|
●
|
in
the case of warrants to purchase our ordinary shares, the right to receive dividends, if any, or, payments upon our liquidation,
dissolution or winding up or to exercise voting rights, if any.
|
Exercise
of Warrants
Each
warrant will entitle the holder to purchase the securities that we specify in the applicable prospectus supplement at the exercise
price that we describe in the applicable prospectus supplement. Unless we otherwise specify in the applicable prospectus supplement,
holders of the warrants may exercise the warrants at any time up to the specified time on the expiration date that we set forth
in the applicable prospectus supplement. After the close of business on the expiration date, unexercised warrants will become
void.
Holders
of the warrants may exercise the warrants by delivering the warrant certificate representing the warrants to be exercised together
with specified information, and paying the required amount to the warrant agent in immediately available funds, as provided in
the applicable prospectus supplement. We will set forth on the reverse side of the warrant certificate and in the applicable prospectus
supplement the information that the holder of the warrant will be required to deliver to the warrant agent.
Upon
receipt of the required payment and the warrant certificate properly completed and duly executed at the corporate trust office
of the warrant agent or any other office indicated in the applicable prospectus supplement, we will issue and deliver the securities
purchasable upon such exercise. If fewer than all of the warrants represented by the warrant certificate are exercised, then we
will issue a new warrant certificate for the remaining amount of warrants. If we so indicate in the applicable prospectus supplement,
holders of the warrants may surrender securities as all or part of the exercise price for warrants.
Enforceability
of Rights by Holders of Warrants
Each
warrant agent will act solely as our agent under the applicable warrant agreement and will not assume any obligation or relationship
of agency or trust with any holder of any warrant. A single bank or trust company may act as warrant agent for more than one issue
of warrants. A warrant agent will have no duty or responsibility in case of any default by us under the applicable warrant agreement
or warrant, including any duty or responsibility to initiate any proceedings at law or otherwise, or to make any demand upon us.
Any holder of a warrant may, without the consent of the related warrant agent or the holder of any other warrant, enforce by appropriate
legal action its right to exercise, and receive the securities purchasable upon exercise of, its warrants.
Warrant
Agreements Will Not Be Qualified Under Trust Indenture Act
No
warrant agreement will be qualified as an indenture, and no warrant agent will be required to qualify as a trustee, under the
Trust Indenture Act. Therefore, holders of warrants issued under a warrant agreement will not have the protection of the Trust
Indenture Act with respect to their warrants.
Modification
of the Warrant Agreement
The
warrant agreements may permit us and the warrant agent, if any, without the consent of the warrant holders, to supplement or amend
the agreement in the following circumstances:
|
●
|
to
cure any ambiguity;
|
|
●
|
to
correct or supplement any provision which may be defective or inconsistent with any other provisions; or
|
|
●
|
to
add new provisions regarding matters or questions that we and the warrant agent may deem necessary or desirable and which do
not adversely affect the interests of the warrant holders.
|
DESCRIPTION
OF DEBT SECURITIES
As
used in this prospectus, debt securities mean the debentures, notes, bonds and other evidences of indebtedness that we may issue
from time to time. The debt securities may be either secured or unsecured and will either be senior debt securities or subordinated
debt securities. The debt securities will be issued under one or more separate indentures between us and a trustee to be specified
in an accompanying prospectus supplement. Senior debt securities will be issued under a new senior indenture. Subordinated debt
securities will be issued under a subordinated indenture. Together, the senior indentures and the subordinated indentures are
sometimes referred to in this prospectus as the indentures. This prospectus, together with the applicable prospectus supplement,
will describe the terms of a particular series of debt securities.
The
statements and descriptions in this prospectus or in any prospectus supplement regarding provisions of the indentures and debt
securities are summaries thereof, do not purport to be complete and are subject to, and are qualified in their entirety by reference
to, all of the provisions of the indentures (and any amendments or supplements we may enter into from time to time which are permitted
under each indenture) and the debt securities, including the definitions therein of certain terms.
General
Unless
otherwise specified in a prospectus supplement, the debt securities will be direct unsecured obligations of the Company. The
senior debt securities will rank equally with any of our other senior and unsubordinated debt. The subordinated debt
securities will be subordinate and junior in right of payment to any senior indebtedness.
Unless
otherwise specified in a prospectus supplement, the indentures do not limit the aggregate principal amount of debt securities
that we may issue and provide that we may issue debt securities from time to time at par or at a discount, and in the case of
the new indentures, if any, in one or more series, with the same or various maturities. Unless indicated in a prospectus supplement,
we may issue additional debt securities of a particular series without the consent of the holders of the debt securities of such
series outstanding at the time of the issuance. Any such additional debt securities, together with all other outstanding debt
securities of that series, will constitute a single series of debt securities under the applicable indenture.
Each
prospectus supplement will describe the terms relating to the specific series of debt securities being offered. These terms will
include some or all of the following:
|
●
|
the
title of the debt securities and whether they are subordinated debt securities or senior debt securities;
|
|
●
|
any
limit on the aggregate principal amount of the debt securities;
|
|
●
|
the
ability to issue additional debt securities of the same series;
|
|
●
|
the
price or prices at which we will sell the debt securities;
|
|
●
|
the
maturity date or dates of the debt securities on which principal will be payable;
|
|
●
|
the
rate or rates of interest, if any, which may be fixed or variable, at which the debt securities will bear interest, or the
method of determining such rate or rates, if any;
|
|
●
|
the
date or dates from which any interest will accrue or the method by which such date or dates will be determined;
|
|
●
|
the
right, if any, to extend the interest payment periods and the duration of any such deferral period, including the maximum
consecutive period during which interest payment periods may be extended;
|
|
●
|
whether
the amount of payments of principal of (and premium, if any) or interest on the debt securities may be determined with reference
to any index, formula or other method, such as one or more currencies, commodities, equity indices or other indices, and the
manner of determining the amount of such payments;
|
|
●
|
the
dates on which we will pay interest on the debt securities and the regular record date for determining who is entitled to
the interest payable on any interest payment date;
|
|
●
|
the
place or places where the principal of (and premium, if any) and interest on the debt securities will be payable, where any
securities may be surrendered for registration of transfer, exchange or conversion, as applicable, and notices and demands
may be delivered to or upon us pursuant to the indenture;
|
|
●
|
if
we possess the option to do so, the periods within which and the prices at which we may redeem the debt securities, in whole
or in part, pursuant to optional redemption provisions, and the other terms and conditions of any such provisions;
|
|
●
|
our
obligation, if any, to redeem, repay or purchase debt securities by making periodic payments to a sinking fund or through
an analogous provision or at the option of holders of the debt securities, and the period or periods within which and the
price or prices at which we will redeem, repay or purchase the debt securities, in whole or in part, pursuant to such obligation,
and the other terms and conditions of such obligation;
|
|
●
|
the
denominations in which the debt securities will be issued, if other than denominations of $1,000 and integral multiples of
$1,000;
|
|
●
|
the
portion, or methods of determining the portion, of the principal amount of the debt securities which we must pay upon the
acceleration of the maturity of the debt securities in connection with an event of default (as described below), if other
than the full principal amount;
|
|
●
|
the
currency, currencies or currency unit in which we will pay the principal of (and premium, if any) or interest, if any, on
the debt securities, if not United States dollars;
|
|
●
|
provisions,
if any, granting special rights to holders of the debt securities upon the occurrence of specified events;
|
|
●
|
any
deletions from, modifications of or additions to the events of default or our covenants with respect to the applicable series
of debt securities, and whether or not such events of default or covenants are consistent with those contained in the applicable
indenture;
|
|
●
|
any
limitation on our ability to incur debt, redeem shares, sell our assets or other restrictions;
|
|
●
|
the
application, if any, of the terms of the indenture relating to defeasance and covenant defeasance (which terms are described
below) to the debt securities;
|
|
●
|
whether
the subordination provisions summarized below or different subordination provisions will apply to the debt securities;
|
|
●
|
the
terms, if any, upon which the holders may convert or exchange the debt securities into or for our ordinary shares or other
securities or property;
|
|
●
|
whether
any of the debt securities will be issued in global form and, if so, the terms and conditions upon which global debt securities
may be exchanged for certificated debt securities;
|
|
●
|
any
change in the right of the trustee or the requisite holders of debt securities to declare the principal amount thereof due
and payable because of an event of default;
|
|
●
|
the
depository for global or certificated debt securities;
|
|
●
|
any
special tax implications of the debt securities;
|
|
●
|
any
foreign tax consequences applicable to the debt securities, including any debt securities denominated and made payable, as
described in the prospectus supplements, in foreign currencies, or units based on or related to foreign currencies;
|
|
●
|
any
trustees, authenticating or paying agents, transfer agents or registrars, or other agents with respect to the debt securities;
|
|
●
|
any
other terms of the debt securities not inconsistent with the provisions of the indentures, as amended or supplemented;
|
|
●
|
to
whom any interest on any debt security shall be payable, if other than the person in whose name the security is registered,
on the record date for such interest, the extent to which, or the manner in which, any interest payable on a temporary global
debt security will be paid if other than in the manner provided in the applicable indenture;
|
|
●
|
if
the principal of or any premium or interest on any debt securities of the series is to be payable in one or more currencies
or currency units other than as stated, the currency, currencies or currency units in which it shall be paid and the periods
within and terms and conditions upon which such election is to be made and the amounts payable (or the manner in which such
amount shall be determined);
|
|
●
|
the
portion of the principal amount of any securities of the series which shall be payable upon declaration of acceleration of
the maturity of the debt securities pursuant to the applicable indenture if other than the entire principal amount; and
|
|
●
|
if
the principal amount payable at the stated maturity of any debt security of the series will not be determinable as of any
one or more dates prior to the stated maturity, the amount which shall be deemed to be the principal amount of such securities
as of any such date for any purpose, including the principal amount thereof which shall be due and payable upon any maturity
other than the stated maturity or which shall be deemed to be outstanding as of any date prior to the stated maturity (or,
in any such case, the manner in which such amount deemed to be the principal amount shall be determined).
|
Unless
otherwise specified in the applicable prospectus supplement, the debt securities will not be listed on any securities exchange
and will be issued in fully-registered form without coupons.
Debt
securities may be sold at a substantial discount below their stated principal amount, bearing no interest or interest at a rate
which at the time of issuance is below market rates. The applicable prospectus supplement will describe the federal income tax
consequences and special considerations applicable to any such debt securities. The debt securities may also be issued as indexed
securities or securities denominated in foreign currencies, currency units or composite currencies, as described in more detail
in the prospectus supplement relating to any of the particular debt securities. The prospectus supplement relating to specific
debt securities will also describe any special considerations and certain additional tax considerations applicable to such debt
securities.
Subordination
The
prospectus supplement relating to any offering of subordinated debt securities will describe the specific subordination provisions.
However, unless otherwise noted in the prospectus supplement, subordinated debt securities will be subordinate and junior in right
of payment to any existing senior indebtedness.
Unless
otherwise specified in the applicable prospectus supplement, under the subordinated indenture, “senior indebtedness”
means all amounts due on obligations in connection with any of the following, whether outstanding at the date of execution of
the subordinated indenture, or thereafter incurred or created:
|
●
|
the
principal of (and premium, if any) and interest due on our indebtedness for borrowed money and indebtedness evidenced by bonds,
notes, debentures or similar instruments or letters of credit (or reimbursement agreements in respect thereof);
|
|
●
|
all
of our capital lease obligations or attributable debt (as defined in the indentures) in respect of sale and leaseback transactions;
|
|
●
|
all
obligations representing the balance deferred and unpaid of the purchase price of any property or services, which purchase
price is due more than six months after the date of placing such property in service or taking delivery and title thereto,
except any such balance that constitutes an accrued expense or trade payable or any similar obligation to trade creditors;
|
|
●
|
all
of our obligations in respect of interest rate swap agreements (whether from fixed to floating or from floating to fixed),
interest rate cap agreements and interest rate collar agreements; other agreements or arrangements designed to manage interest
rates or interest rate risk; and other agreements or arrangements designed to protect against fluctuations in currency exchange
rates or commodity prices;
|
|
●
|
all
obligations of the types referred to above of other persons for the payment of which we are responsible or liable as obligor,
guarantor or otherwise; and
|
|
●
|
all
obligations of the types referred to above of other persons secured by any lien on any property or asset of ours (whether
or not such obligation is assumed by us).
|
However,
senior indebtedness does not include:
|
●
|
any
indebtedness which expressly provides that such indebtedness shall not be senior in right of payment to the subordinated debt
securities, or that such indebtedness shall be subordinated to any other of our indebtedness, unless such indebtedness expressly
provides that such indebtedness shall be senior in right of payment to the subordinated debt securities;
|
|
●
|
any
of our obligations to our subsidiaries or of a subsidiary guarantor to us or any other of our other subsidiaries;
|
|
●
|
any
liability for federal, state, local or other taxes owed or owing by us or any subsidiary guarantor,
|
|
●
|
any
accounts payable or other liability to trade creditors arising in the ordinary course of business (including guarantees thereof
or instruments evidencing such liabilities);
|
|
●
|
any
obligations with respect to any capital stock;
|
|
●
|
any
indebtedness incurred in violation of the indenture, provided that indebtedness under our credit facilities will not cease
to be senior indebtedness under this bullet point if the lenders of such indebtedness obtained an officer’s certificate
as of the date of incurrence of such indebtedness to the effect that such indebtedness was permitted to be incurred by the
indenture; and
|
|
●
|
any
of our indebtedness in respect of the subordinated debt securities.
|
Senior
indebtedness shall continue to be senior indebtedness and be entitled to the benefits of the subordination provisions irrespective
of any amendment, modification or waiver of any term of such senior indebtedness.
Unless
otherwise noted in an accompanying prospectus supplement, if we default in the payment of any principal of (or premium, if any)
or interest on any senior indebtedness when it becomes due and payable, whether at maturity or at a date fixed for prepayment
or by declaration or otherwise, then, unless and until such default is cured or waived or ceases to exist, we will make no direct
or indirect payment (in cash, property, securities, by set-off or otherwise) in respect of the principal of or interest on the
subordinated debt securities or in respect of any redemption, retirement, purchase or other requisition of any of the subordinated
debt securities.
In
the event of the acceleration of the maturity of any subordinated debt securities, the holders of all senior debt securities outstanding
at the time of such acceleration, subject to any security interest, will first be entitled to receive payment in full of all amounts
due on the senior debt securities before the holders of the subordinated debt securities will be entitled to receive any payment
of principal (and premium, if any) or interest on the subordinated debt securities.
If
any of the following events occurs, we will pay in full all senior indebtedness before we make any payment or distribution under
the subordinated debt securities, whether in cash, securities or other property, to any holder of subordinated debt securities:
|
●
|
any
dissolution or winding-up or liquidation or reorganization of China Internet Nationwide Financial Service, Inc. whether
voluntary or involuntary or in bankruptcy,
|
|
●
|
insolvency
or receivership;
|
|
●
|
any
general assignment by us for the benefit of creditors; or
|
|
●
|
any
other marshaling of our assets or liabilities.
|
In
such event, any payment or distribution under the subordinated debt securities, whether in cash, securities or other property,
which would otherwise (but for the subordination provisions) be payable or deliverable in respect of the subordinated debt securities,
will be paid or delivered directly to the holders of senior indebtedness in accordance with the priorities then existing among
such holders until all senior indebtedness has been paid in full. If any payment or distribution under the subordinated debt securities
is received by the trustee of any subordinated debt securities in contravention of any of the terms of the subordinated indenture
and before all the senior indebtedness has been paid in full, such payment or distribution will be received in trust for the benefit
of, and paid over or delivered and transferred to, the holders of the senior indebtedness at the time outstanding in accordance
with the priorities then existing among such holders for application to the payment of all senior indebtedness remaining unpaid
to the extent necessary to pay all such senior indebtedness in full.
The
subordinated indenture does not limit the issuance of additional senior indebtedness.
Events
of Default, Notice and Waiver
Unless
an accompanying prospectus supplement states otherwise, the following shall constitute “events of default” under the
indentures with respect to each series of debt securities:
|
●
|
we
default for 30 consecutive days in the payment when due of interest on the debt securities;
|
|
●
|
we
default in the payment when due (at maturity, upon redemption or otherwise) of the principal of, or premium, if any, on the
debt securities;
|
|
●
|
our
failure to observe or perform any other of our covenants or agreements with respect to such debt securities for 60 days after
we receive notice of such failure;
|
|
●
|
certain
events of bankruptcy, insolvency or reorganization of the China Internet Nationwide Financial
Services,
Inc.; or
|
|
●
|
any
other event of default provided with respect to securities of that series.
|
Unless
an accompanying prospectus supplement states otherwise, if an event of default with respect to any debt securities of any series
outstanding under either of the indentures shall occur and be continuing, the trustee under such indenture or the holders of at
least 25% (or at least 10%, in respect of a remedy (other than acceleration) for certain events of default relating to the payment
of dividends) in aggregate principal amount of the debt securities of that series outstanding may declare, by notice as provided
in the applicable indenture, the principal amount (or such lesser amount as may be provided for in the debt securities of that
series) of all the debt securities of that series outstanding to be due and payable immediately; provided that, in the case of
an event of default involving certain events in bankruptcy, insolvency or reorganization, acceleration is automatic; and, provided
further, that after such acceleration, but before a judgment or decree based on acceleration, the holders of a majority in aggregate
principal amount of the outstanding debt securities of that series may, under certain circumstances, rescind and annul such acceleration
if all events of default, other than the nonpayment of accelerated principal, have been cured or waived. Upon the acceleration
of the maturity of original issue discount securities, an amount less than the principal amount thereof will become due and payable.
Reference is made to the prospectus supplement relating to any original issue discount securities for the particular provisions
relating to acceleration of maturity thereof.
Any
past default under either indenture with respect to debt securities of any series, and any event of default arising therefrom,
may be waived by the holders of a majority in principal amount of all debt securities of such series outstanding under such indenture,
except in the case of (1) default in the payment of the principal of (or premium, if any) or interest on any debt securities of
such series or (2) certain events of default relating to the payment of dividends.
The
trustee is required within 90 days after the occurrence of a default (which is known to the trustee and is continuing), with respect
to the debt securities of any series (without regard to any grace period or notice requirements), to give to the holders of the
debt securities of such series notice of such default.
The
trustee, subject to its duties during default to act with the required standard of care, may require indemnification by the holders
of the debt securities of any series with respect to which a default has occurred before proceeding to exercise any right or power
under the indentures at the request of the holders of the debt securities of such series. Subject to such right of indemnification
and to certain other limitations, the holders of a majority in principal amount of the outstanding debt securities of any series
under either indenture may direct the time, method and place of conducting any proceeding for any remedy available to the trustee,
or exercising any trust or power conferred on the trustee with respect to the debt securities of such series, provided that such
direction shall not be in conflict with any rule of law or with the applicable indenture and the trustee may take any other action
deemed proper by the trustee which is not inconsistent with such direction.
No
holder of a debt security of any series may institute any action against us under either of the indentures (except actions for
payment of overdue principal of (and premium, if any) or interest on such debt security or for the conversion or exchange of such
debt security in accordance with its terms) unless (1) the holder has given to the trustee written notice of an event of default
and of the continuance thereof with respect to the debt securities of such series specifying an event of default, as required
under the applicable indenture, (2) the holders of at least 25% in aggregate principal amount of the debt securities of that series
then outstanding under such indenture shall have requested the trustee to institute such action and offered to the trustee indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be incurred in compliance with such request; (3)
the trustee shall not have instituted such action within 60 days of such request and (4) no direction inconsistent with such written
request has been given to the trustee during such 60-day period by the holders of a majority in principal amount of the debt securities
of that series. We are required to furnish annually to the trustee statements as to our compliance with all conditions and covenants
under each indenture.
Discharge,
Defeasance and Covenant Defeasance
We
may discharge or defease our obligations under the indenture as set forth below, unless otherwise indicated in the applicable
prospectus supplement.
We
may discharge certain obligations to holders of any series of debt securities issued under either the senior indenture or the
subordinated indenture which have not already been delivered to the trustee for cancellation by irrevocably depositing with the
trustee money in an amount sufficient to pay and discharge the entire indebtedness on such debt securities not previously delivered
to the trustee for cancellation, for principal and any premium and interest to the date of such deposit (in the case of debt securities
which have become due and payable) or to the stated maturity or redemption date, as the case may be, and we or, if applicable,
any guarantor, have paid all other sums payable under the applicable indenture.
If
indicated in the applicable prospectus supplement, we may elect either (1) to defease and be discharged from any and all obligations
with respect to the debt securities of or within any series (except in all cases as otherwise provided in the relevant indenture)
(“legal defeasance”) or (2) to be released from our obligations with respect to certain covenants applicable to the
debt securities of or within any series (“covenant defeasance”), upon the deposit with the relevant indenture trustee,
in trust for such purpose, of money and/or government obligations which through the payment of principal and interest in accordance
with their terms will provide money in an amount sufficient to pay the principal of (and premium, if any) or interest on such
debt securities to maturity or redemption, as the case may be, and any mandatory sinking fund or analogous payments thereon. As
a condition to legal defeasance or covenant defeasance, we must deliver to the trustee an opinion of counsel to the effect that
the holders of such debt securities will not recognize income, gain or loss for federal income tax purposes as a result of such
legal defeasance or covenant defeasance and will be subject to federal income tax on the same amounts and in the same manner and
at the same times as would have been the case if such legal defeasance or covenant defeasance had not occurred. Such opinion of
counsel, in the case of legal defeasance under clause (i) above, must refer to and be based upon a ruling of the Internal Revenue
Service or a change in applicable federal income tax law occurring after the date of the relevant indenture. In addition, in the
case of either legal defeasance or covenant defeasance, we shall have delivered to the trustee (1) if applicable, an officer’s
certificate to the effect that the relevant debt securities exchange(s) have informed us that neither such debt securities nor
any other debt securities of the same series, if then listed on any securities exchange, will be delisted as a result of such
deposit and (2) an officer’s certificate and an opinion of counsel, each stating that all conditions precedent with respect
to such legal defeasance or covenant defeasance have been complied with.
We
may exercise our defeasance option with respect to such debt securities notwithstanding our prior exercise of our covenant defeasance
option.
Modification
and Waiver
Under
the indentures, unless an accompanying prospectus supplement states otherwise, we and the applicable trustee may supplement the
indentures for certain purposes which would not materially adversely affect the interests or rights of the holders of debt securities
of a series without the consent of those holders. We and the applicable trustee may also modify the indentures or any supplemental
indenture in a manner that affects the interests or rights of the holders of debt securities with the consent of the holders of
at least a majority in aggregate principal amount of the outstanding debt securities of each affected series issued under the
indenture. However, the indentures require the consent of each holder of debt securities that would be affected by any modification
which would:
|
●
|
reduce
the principal amount of debt securities whose holders must consent to an amendment, supplement or waiver;
|
|
●
|
reduce
the principal of or change the fixed maturity of any debt security or, except as provided in any prospectus supplement, alter
or waive any of the provisions with respect to the redemption of the debt securities;
|
|
●
|
reduce
the rate of or change the time for payment of interest, including default interest, on any debt security;
|
|
●
|
waive
a default or event of default in the payment of principal of or interest or premium, if any, on, the debt securities (except
a rescission of acceleration of the debt securities by the holders of at least a majority in aggregate principal amount of
the then outstanding debt securities and a waiver of the payment default that resulted from such acceleration);
|
|
●
|
make
any debt security payable in money other than that stated in the debt securities;
|
|
●
|
make
any change in the provisions of the applicable indenture relating to waivers of past defaults or the rights of holders of
the debt securities to receive payments of principal of, or interest or premium, if any, on, the debt securities;
|
|
●
|
waive
a redemption payment with respect to any debt security (except as otherwise provided in the applicable prospectus supplement);
|
|
●
|
except
in connection with an offer by us to purchase all debt securities, (1) waive certain events of default relating to the payment
of dividends or (2) amend certain covenants relating to the payment of dividends and the purchase or redemption of certain
equity interests;
|
|
●
|
make
any change to the subordination or ranking provisions of the indenture or the related definitions that adversely affect the
rights of any holder; or
|
|
●
|
make
any change in the preceding amendment and waiver provisions.
|
The
indentures permit the holders of at least a majority in aggregate principal amount of the outstanding debt securities of any series
issued under the indenture which is affected by the modification or amendment to waive our compliance with certain covenants contained
in the indentures.
Payment
and Paying Agents
Unless
otherwise indicated in the applicable prospectus supplement, payment of interest on a debt security on any interest payment date
will be made to the person in whose name a debt security is registered at the close of business on the record date for the interest.
Unless
otherwise indicated in the applicable prospectus supplement, principal, interest and premium on the debt securities of a particular
series will be payable at the office of such paying agent or paying agents as we may designate for such purpose from time to time.
Notwithstanding the foregoing, at our option, payment of any interest may be made by check mailed to the address of the person
entitled thereto as such address appears in the security register.
Unless
otherwise indicated in the applicable prospectus supplement, a paying agent designated by us will act as paying agent for payments
with respect to debt securities of each series. All paying agents initially designated by us for the debt securities of a particular
series will be named in the applicable prospectus supplement. We may at any time designate additional paying agents or rescind
the designation of any paying agent or approve a change in the office through which any paying agent acts, except that we will
be required to maintain a paying agent in each place of payment for the debt securities of a particular series.
All
moneys paid by us to a paying agent for the payment of the principal, interest or premium on any debt security which remain unclaimed
at the end of two years after such principal, interest or premium has become due and payable will be repaid to us upon request,
and the holder of such debt security thereafter may look only to us for payment thereof.
Denominations,
Registrations and Transfer
Unless
an accompanying prospectus supplement states otherwise, debt securities will be represented by one or more global certificates
registered in the name of a nominee for The Depository Trust Company, or DTC. In such case, each holder’s beneficial interest
in the global securities will be shown on the records of DTC and transfers of beneficial interests will only be effected through
DTC’s records.
A
holder of debt securities may only exchange a beneficial interest in a global security for certificated securities registered
in the holder’s name if:
|
●
|
we
deliver to the trustee notice from DTC that it is unwilling or unable to continue to act as depository or that it is no longer
a clearing agency registered under the Exchange Act and, in either case, a successor depositary is not appointed by us within
120 days after the date of such notice from DTC;
|
|
●
|
we
in our sole discretion determine that the debt securities (in whole but not in part) should be exchanged for definitive debt
securities and deliver a written notice to such effect to the trustee; or
|
|
●
|
there
has occurred and is continuing a default or event of default with respect to the debt securities.
|
If
debt securities are issued in certificated form, they will only be issued in the minimum denomination specified in the accompanying
prospectus supplement and integral multiples of such denomination. Transfers and exchanges of such debt securities will only be
permitted in such minimum denomination. Transfers of debt securities in certificated form may be registered at the trustee’s
corporate office or at the offices of any paying agent or trustee appointed by us under the indentures. Exchanges of debt securities
for an equal aggregate principal amount of debt securities in different denominations may also be made at such locations.
Governing
Law
The
indentures and debt securities will be governed by, and construed in accordance with, the laws of the State of New York, without
regard to its principles of conflicts of laws, except to the extent the Trust Indenture Act is applicable or as otherwise agreed
to by the parties thereto.
Trustee
The
trustee or trustees under the indentures will be named in any applicable prospectus supplement.
Conversion
or Exchange Rights
The
prospectus supplement will describe the terms, if any, on which a series of debt securities may be convertible into or exchangeable
for our ordinary shares or other debt securities. These terms will include provisions as to whether conversion or exchange is
mandatory, at the option of the holder or at our option. These provisions may allow or require the number of shares of our ordinary
shares or other securities to be received by the holders of such series of debt securities to be adjusted. Any such conversion
or exchange will comply with applicable BVI Law and our memorandum and articles of association.
DESCRIPTION
OF UNITS
We
may issue units comprising one or more of the other securities described in this prospectus in any combination. Each unit will
be issued so that the holder of the unit is also the holder of each security included in the unit. Thus, the holder of a unit
will have the rights and obligations of a holder of each included security. The unit agreement under which a unit is issued may
provide that the securities included in the unit may not be held or transferred separately, at any time or at any time before
a specified date or occurrence.
The
applicable prospectus supplement may describe:
|
●
|
the
designation and terms of the units and of the securities comprising the units, including whether and under what circumstances
those securities may be held or transferred separately;
|
|
●
|
any
provisions for the issuance, payment, settlement, transfer or exchange of the units or of the securities comprising the units;
and
|
|
●
|
whether
the units will be issued in fully registered or global form.
|
The
applicable prospectus supplement will describe the terms of any units. The preceding description and any description of units
in the applicable prospectus supplement does not purport to be complete and is subject to and is qualified in its entirety by
reference to the unit agreement and, if applicable, collateral arrangements and depository arrangements relating to such units.
DESCRIPTION
OF SHARE PURCHASE CONTRACTS AND SHARE PURCHASE UNITS
We
may issue share purchase contracts, including contracts obligating holders to purchase from us, and obligating us to sell to the
holders, a specified number of ordinary shares or other securities registered hereunder at a future date or dates, which we refer
to in this prospectus as “share purchase contracts.” The price per share of the securities and the number of shares
of the securities may be fixed at the time the share purchase contracts are issued or may be determined by reference to a specific
formula set forth in the share purchase contracts.
The
share purchase contracts may be issued separately or as part of units consisting of a share purchase contract and debt securities,
warrants, other securities registered hereunder or debt obligations of third parties, including U.S. treasury securities, securing
the holders’ obligations to purchase the securities under the share purchase contracts, which we refer to herein as “share
purchase units.” The share purchase contracts may require holders to secure their obligations under the share purchase contracts
in a specified manner. The share purchase contracts also may require us to make periodic payments to the holders of the share
purchase units or vice versa, and those payments may be unsecured or refunded on some basis.
The
share purchase contracts, and, if applicable, collateral or depositary arrangements, relating to the share purchase contracts
or share purchase units, will be filed with the SEC in connection with the offering of share purchase contracts or share purchase
units. The prospectus supplement relating to a particular issue of share purchase contracts or share purchase units will describe
the terms of those share purchase contracts or share purchase units, including the following:
|
●
|
if
applicable, a discussion of material tax considerations; and
|
|
●
|
any
other information we think is important about the share purchase contracts or the share purchase units.
|
DESCRIPTION
OF RIGHTS
We
may issue rights to purchase ordinary shares that we may offer to our securityholders. The rights may or may not be transferable
by the persons purchasing or receiving the rights. In connection with any rights offering, we may enter into a standby underwriting
or other arrangement with one or more underwriters or other persons pursuant to which such underwriters or other persons would
purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will be issued under
a separate rights agent agreement to be entered into between us and a bank or trust company, as rights agent, that we will name
in the applicable prospectus supplement. The rights agent will act solely as our agent in connection with the rights and will
not assume any obligation or relationship of agency or trust for or with any holders of rights certificates or beneficial owners
of rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among
other matters:
|
●
|
the
date of determining the securityholders entitled to the rights distribution;
|
|
●
|
the
aggregate number of rights issued and the aggregate number of ordinary shares purchasable upon exercise of the rights;
|
|
●
|
the
exercise price;
|
|
●
|
the
conditions to completion of the rights offering;
|
|
●
|
the
date on which the right to exercise the rights will commence and the date on which the rights will expire; and
|
|
●
|
applicable
tax considerations.
|
Each
right would entitle the holder of the rights to purchase for cash the principal amount of debt securities or ordinary shares at
the exercise price set forth in the applicable prospectus supplement. Rights may be exercised at any time up to the close of business
on the expiration date for the rights provided in the applicable prospectus supplement. After the close of business on the expiration
date, all unexercised rights will become void.
If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to
persons other than our security holders, to or through agents, underwriters or dealers or through a combination of such methods,
including pursuant to standby arrangements, as described in the applicable prospectus supplement.
TAXATION
Information
regarding taxation is set forth under the heading “Item 10.E. Taxation” in our Annual Report, as amended, on Form
20-F for the year ended December 31, 2018, which is incorporated in this prospectus by reference, as updated by our subsequent
filings under the Exchange Act.
PLAN
OF DISTRIBUTION
We
may sell the securities described in this prospectus through underwriters or dealers, through agents, or directly to one or more
purchasers or through a combination of these methods. The applicable prospectus supplement will describe the terms of the offering
of the securities, including:
|
●
|
the
name or names of any underwriters, if any, and if required, any dealers or agents, and the amount of securities underwritten
or purchased by each of them, if any;
|
|
●
|
the
public offering price or purchase price of the securities from us and the net proceeds to us from the sale of the securities;
|
|
●
|
any
underwriting discounts and other items constituting underwriters’ compensation;
|
|
●
|
any
discounts or concessions allowed or re-allowed or paid to dealers; and
|
|
●
|
any
securities exchange or market on which the securities may be listed.
|
We
may distribute the securities from time to time in one or more transactions at:
|
●
|
a
fixed price or prices, which may be changed;
|
|
●
|
market
prices prevailing at the time of sale;
|
|
●
|
varying
prices determined at the time of sale related to such prevailing market prices; or
|
|
●
|
negotiated
prices.
|
Only
underwriters named in the prospectus supplement will be underwriters of the securities offered by the prospectus supplement.
If
we use underwriters in the sale, the underwriters will either acquire the securities for their own account and may resell the
securities from time to time in one or more transactions at a fixed public offering price or at varying prices determined at the
time of sale, or sell the shares on a “best efforts, minimum/maximum basis” when the underwriters agree to do their
best to sell the securities to the public. We may offer the securities to the public through underwriting syndicates represented
by managing underwriters or by underwriters without a syndicate. Any public offering price and any discounts or concessions allowed
or re-allowed or paid to dealers may change from time to time.
If
we use a dealer in the sale of the securities being offered pursuant to this prospectus or any prospectus supplement, the securities
will be sold directly to the dealer, as principal. The dealer may then resell the securities to the public at varying prices to
be determined by the dealer at the time of resale.
Our
ordinary shares are listed on the Nasdaq Global Market. Unless otherwise specified in the related prospectus supplement, all securities
we offer, other than ordinary shares, will be new issues of securities with no established trading market. Any underwriter may
make a market in these securities, but will not be obligated to do so and may discontinue any market making at any time without
notice. We may apply to list any series of warrants or other securities that we offer on an exchange, but we are not obligated
to do so. Therefore, there may not be liquidity or a trading market for any series of securities.
We
may sell the securities directly or through agents we designate from time to time. We will name any agent involved in the offering
and sale of securities and we will describe any commissions we may pay the agent in the applicable prospectus supplement.
We
may authorize agents or underwriters to solicit offers by institutional investors to purchase securities from us at the public
offering price set forth in the prospectus supplement pursuant to delayed delivery contracts providing for payment and delivery
on a specified date in the future. We will describe the conditions to these contracts and the commissions we must pay for solicitation
of these contracts in the applicable prospectus supplement.
In
connection with the sale of the securities, underwriters, dealers or agents may receive compensation from us or from purchasers
of the securities for whom they act as agents in the form of discounts, concessions or commissions. Underwriters may sell the
securities to or through dealers, and those dealers may receive compensation in the form of discounts, concessions or commissions
from the underwriters or commissions from the purchasers for whom they may act as agents. Underwriters, dealers and agents that
participate in the distribution of the securities, and any institutional investors or others that purchase securities directly
and then resell the securities, may be deemed to be underwriters, and any discounts or commissions received by them from us and
any profit on the resale of the securities by them may be deemed to be underwriting discounts and commissions under the Securities
Act.
We
may provide agents and underwriters with indemnification against particular civil liabilities, including liabilities under the
Securities Act, or contribution with respect to payments that the agents or underwriters may make with respect to such liabilities.
Agents and underwriters may engage in transactions with, or perform services for, us in the ordinary course of business.
In
addition, we may enter into derivative transactions with third parties (including the writing of options), or sell securities
not covered by this prospectus to third parties in privately negotiated transactions. If the applicable prospectus supplement
indicates, in connection with such a transaction, the third parties may, pursuant to this prospectus and the applicable prospectus
supplement, sell securities covered by this prospectus and the applicable prospectus supplement. If so, the third party may use
securities borrowed from us or others to settle such sales and may use securities received from us to close out any related short
positions. We may also loan or pledge securities covered by this prospectus and the applicable prospectus supplement to third
parties, who may sell the loaned securities or, in an event of default in the case of a pledge, sell the pledged securities pursuant
to this prospectus and the applicable prospectus supplement. The third party in such sale transactions will be an underwriter
and will be identified in the applicable prospectus supplement or in a post-effective amendment.
To
facilitate an offering of a series of securities, persons participating in the offering may engage in transactions that stabilize,
maintain, or otherwise affect the market price of the securities. This may include over-allotments or short sales of the securities,
which involves the sale by persons participating in the offering of more securities than have been sold to them by us. In those
circumstances, such persons would cover such over-allotments or short positions by purchasing in the open market or by exercising
the over-allotment option granted to those persons. In addition, those persons may stabilize or maintain the price of the securities
by bidding for or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to
underwriters or dealers participating in any such offering may be reclaimed if securities sold by them are repurchased in connection
with stabilization transactions. The effect of these transactions may be to stabilize or maintain the market price of the securities
at a level above that which might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at
any time. We make no representation or prediction as to the direction or magnitude of any effect that the transactions described
above, if implemented, may have on the price of our securities.
EXPENSES
The
following table sets forth the estimated costs and expenses, other than underwriting discounts and commissions, payable by us
in connection with the offering of the securities being registered. All the amounts shown are estimates, except for the SEC registration
fee.
SEC registration fee
|
|
$
|
6,060
|
|
FINRA fee
|
|
$
|
*
|
|
Legal fees and expenses
|
|
$
|
*
|
|
Accounting fees and expenses
|
|
$
|
*
|
|
Printing fees and expenses
|
|
$
|
*
|
|
Miscellaneous
|
|
$
|
*
|
|
Total
|
|
$
|
6,060
|
|
*
Estimated expenses are not presently known. The foregoing sets forth the general categories of expenses (other than underwriting
discounts and commissions) that the Company anticipates it will incur in connection with the offering of securities under the
registration statement. An estimate of the aggregate expenses in connection with the issuance and distribution of the securities
being offered will be included in the applicable prospectus supplement.
WHERE
YOU CAN GET MORE INFORMATION
We
have filed with the SEC a registration statement on Form F-3 under the Securities Act with respect to the securities described
in this prospectus and any accompanying prospectus supplement, as applicable. This prospectus and any accompanying prospectus
supplement, which constitute a part of that registration statement, do not contain all of the information set forth in that registration
statement and its exhibits. For further information with respect to us and our securities, you should consult the registration
statement and its exhibits.
We
are subject to the informational requirements of the Exchange Act, and, in accordance with the Exchange Act, we also must file
reports with, and furnish other information to, the SEC. As a foreign private issuer, we are exempt from the rules under the Exchange
Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt
from the reporting and short-swing profit recovery provisions contained in Section 16 of the Exchange Act. In addition, we are
not required to publish financial statements as promptly as U.S. companies. However, we file with the SEC an annual report on
Form 20-F containing financial statements audited by an independent registered public accounting firm, and we submit to the SEC,
on Form 6-K, unaudited interim financial information.
You
may read and copy any document we file with, or furnish to, the SEC at the SEC’s Public Reference Room at 100 F Street,
N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room. The
SEC also maintains an internet site (www.sec.gov) that makes available reports and other information that we file or furnish electronically
with it.
INCORPORATION
BY REFERENCE
The
SEC allows us to “incorporate by reference” into this prospectus the documents we file with, or furnish to, it, which
means that we can disclose important information to you by referring you to these documents. The information that we incorporate
by reference into this prospectus forms a part of this prospectus, and information that we file later with the SEC automatically
updates and supersedes any information in this prospectus. We incorporate by reference into this prospectus the documents listed
below:
|
●
|
our
Annual Report on Form 20-F for the fiscal year ended December 31, 2018 filed with the SEC on May 10, 2019
|
All
documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this prospectus
and prior to the termination of the offering of the securities offered by this prospectus are incorporated by reference into this
prospectus and form part of this prospectus from the date of filing or furnishing of these documents. Any documents that we furnish
to the SEC on Form 6-K subsequent to the date of this prospectus will be incorporated by reference into this prospectus only to
the extent specifically set forth in the Form 6-K.
Any
statement contained in a document that is incorporated by reference into this prospectus will be deemed to be modified or superseded
for the purposes of this prospectus to the extent that a statement contained in this prospectus, or in any other subsequently
filed document which also is or is deemed to be incorporated by reference into this prospectus, modifies or supersedes that statement.
The modifying or superseding statement does not need to state that it has modified or superseded a prior statement or include
any other information set forth in the document that it modifies or supersedes.
Upon
request, we will provide, without charge, to each person who receives this prospectus, a copy of any or all of the documents incorporated
by reference (other than exhibits to the documents that are not specifically incorporated by reference in the documents). Please
direct written or oral requests for copies to our Chief Financial; Officer at 93 Jianguo Road, No. 6 Building, 11th Floor, Chaoyang
District, Beijing, People’s Republic of China 100020.
ENFORCEABILITY
OF CIVIL LIABILITIES
We
are incorporated under the laws of the British Virgin Islands with limited liability. We are incorporated in the British
Virgin Islands because of certain benefits associated with being a British Virgin Islands company, such as political and
economic stability, an effective judicial system, a favorable tax system, the absence of exchange control or currency
restrictions and the availability of professional and support services. However, the British Virgin Islands has a less
developed body of securities laws as compared to the United States and provides protections for investors to a lesser extent.
In addition, British Virgin Islands companies may not have standing to sue before the federal courts of the United
States.
Substantially
all of our assets are located outside the United States. In addition, a majority of our directors and officers are nationals and/or
residents of countries other than the United States, and all or a substantial portion of such persons’ assets are located
outside the United States. As a result, it may be difficult for investors to effect service of process within the United States
upon us or such persons or to enforce against them or against us, judgments obtained in United States courts, including judgments
predicated upon the civil liability provisions of the securities laws of the United States or any state thereof.
We have appointed Transhare
Securities Transfer and Registrar, as our agent to receive service of process with respect to any action brought against
us in the United States District Court for districts in the State of New York under the federal securities laws of the United
States or of any State of the United States or any action brought against us in the Supreme Court of the State of New York under
the securities laws of the State of New York.
There
is uncertainty as to whether the courts of China would (1) recognize or enforce judgments of United States courts obtained against
us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof,
or (2) be competent to hear original actions brought in each respective jurisdiction, against us or such persons predicated upon
the securities laws of the United States or any state thereof.
The
recognition and enforcement of foreign judgments are provided for under the Chinese Civil Procedure Law. Chinese courts may recognize
and enforce foreign judgments in accordance with the requirements of the Chinese Civil Procedure Law based either on treaties
between China and the country where the judgment is made or in reciprocity between jurisdictions. China does not have any treaties
or other agreements with the British Virgin Islands or the United States that provide for the reciprocal recognition and enforcement
of foreign judgments. As a result, it is uncertain whether a Chinese court would enforce a judgment rendered by a court in either
of these two jurisdictions.
The
United States and the British Virgin Islands do not have a treaty providing for reciprocal recognition and enforcement of judgments
of courts of the United States in civil and commercial matters and that a final judgment for the payment of money rendered by
any general or state court in the United States based on civil liability, whether or not predicated solely upon the U.S. federal
securities laws, may not be enforceable in the British Virgin Islands. A final and conclusive judgment obtained in U.S. federal
or state courts under which a sum of money is payable as compensatory damages (i.e., not being a sum claimed by a revenue authority
for taxes or other charges of a similar nature by a governmental authority, or in respect of a fine or penalty or multiple or
punitive damages) may be the subject of an action on a debt in the court of the British Virgin Islands.
MATERIAL
CHANGES
Except
as otherwise described in our Annual Report on Form 20-F for the fiscal year ended December 31, 2018, in our Reports on Form 6-K
filed or submitted under the Exchange Act and incorporated by reference herein and as disclosed in this prospectus, no reportable
material changes have occurred since December 31, 2018.
LEGAL
MATTERS
Sichenzia
Ross Ference LLP is acting as counsel to our company regarding U.S. securities law matters. The current address of Sichenzia Ross
Ference LLP is 1185 Avenue of the Americas, 37th Floor, New York, NY 10036. Harney Westwood & Riegels LP is acting
as our British Virgin Islands counsel. The current address of Harney Westwood & Riegels LP is Craigmuir Chambers, PO Box 71,
Road Town, Tortola VG1110, British Virgin Islands. Any underwriters or placement agents will be represented by their own counsel.
EXPERTS
Our
consolidated financial statements as of December 31, 2018 and for the year then ended incorporated by reference in this prospectus
and have been so included in reliance on the reports of Wei, Wei & Co., LLP, as our independent registered public accounting
firm, given on the authority of said firms as experts in accounting and auditing. The current address of Wei, Wei & Co., LLP
is 133-10 39th Ave, Flushing, NY 11354.
Our
consolidated financial statements as of December 31, 2017 and for the year then ended incorporated by reference in this prospectus
and have been so included in reliance on the report of Marcum Bernstein & Pinchuk LLP, as independent registered public accounting
firm, given on the authority of said firm as expert in accounting and auditing. The current address of Marcum Bernstein &
Pinchuk LLP is 7 Pennsylvania Plaza Suite 830, New York, NY 10001.
INTERESTS
OF EXPERTS AND COUNSEL
No
named expert of or counselor to us was employed on a contingent basis, or owns an amount of our shares (or those of our subsidiaries)
which is material to that person, or has a material, direct or indirect economic interest in us or that depends of the success
of the offering.
COMMISSION
POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the registrant pursuant to the foregoing provisions, the registrant has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
8.
|
Indemnification
of Directors and Officers
|
Under
BVI Law, each of our directors , in exercising his or her powers or performing his or her duties, is required to act honestly
and in good faith and in what the director believes to be in the best interests of the Company and exercise the care, diligence
and skill that a reasonable director would exercise in the same circumstances taking into account, but not without limitation:
(a) the nature of the Company; (b) the nature of the decision; and (c) the position of the director and the nature of the responsibilities
undertaken by him. BVI Law does not limit the extent to which a company’s memorandum and articles of association may provide
for indemnification of officers and directors, except to the extent any such provision may be held by the British Virgin Islands
courts to be contrary to public policy, such as to provide indemnification against civil fraud or the consequences of committing
a crime.
Under
our memorandum and articles of association, we shall indemnify against all expenses, including legal fees, and against all judgments,
fines and amounts paid in settlement and reasonably incurred in connection withlegal, criminal, administrative or investigative
proceedings any person who: (a) is or was a party or is threatened to be made a party to any threatened, pending or completed
proceedings, whether civil, criminal, administrative or investigative, by reason of the fact that the person is or was a director
of the Company; or (b) is or was, at the request of the Company, serving as a director of, or in any other capacity is or was
acting for, another body corporate or a partnership, joint venture, trust or other enterprise.
To
be entitled to indemnification, these persons must have acted honestly and in good faith with a view to the best interests of
the company and, in the case of criminal proceedings, they must have had no reasonable cause to believe their conduct was unlawful.
The decision of our board of directors as to whether such a person acted honestly and in good faith with a view to the best interests
of the Company and as to whether the person had no reasonable cause to believe that his or her conduct was unlawful is, in the
absence of fraud, sufficient for the purposes of the indemnification, unless a question of law is involved. The termination of
any proceedings by any judgment, order, settlement, conviction or the entering of a nolle prosequi does not, by itself,
create a presumption that the person did not act honestly and in good faith and with a view to our best interests or that the
person had reasonable cause to believe that his or her conduct was unlawful. Such limitation of liability does not affect the
availability of equitable remedies such as injunctive relief or rescission. These provisions will not limit the liability of directors
under United States federal securities laws.
We
may purchase and maintain insurance in relation to any person who is or was a director, officer of liquidator of the Company,
or who at the request of the Company is or was serving as a director, officer of liquidator of, or in any other capacity is or
was acting for, another body corporate or a partnership, joint venture, trust or other enterprise, against any liability asserted
against the person and incurred by the person in that capacity, whether or not we have or would have had the power to indemnify
the directors or officers against the liability as provided in our articles of association.
Insofar
as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Registrant pursuant to the foregoing provisions, the Registrant has been informed that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
The
following exhibits are attached hereto:
*
To be filed, if necessary, after effectiveness of this registration statement by an amendment to the registration statement or
incorporated by reference to a Current Report on Form 6-K filed in connection with an underwritten offering of the shares offered
hereunder.
+
Filed herewith
|
(1)
|
Previously
filed with the Draft Registration Statement on Form F-1, filed with the SEC on November 4, 2016 and incorporated herein by
reference.
|
|
(2)
|
Previously
filed with the Registration Statement on Form F-1 (Registration Number: 333-217326), filed with the SEC on April 17, 2017
and incorporated herein by reference.
|
The
undersigned Registrant hereby undertakes:
|
(1)
|
To
file, during any period in which offers or sales of securities are being made, a post-effective amendment to this registration
statement:
|
|
(i)
|
To
include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
|
|
(ii)
|
To
reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information
set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered
(if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate
offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement;
and
|
|
(iii)
|
To
include any material information with respect to the plan of distribution not previously disclosed in the registration statement
or any material change to such information in the registration statement.
|
|
(2)
|
That,
for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(3)
|
To
remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
|
|
|
|
|
(4)
|
To
file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A. of
Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise
required by Section 10(a)(3) of the Act need not be furnished, provided that the Registrant includes in the prospectus, by
means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary
to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding
the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include
financial statements and information required by Section 10(a)(3) of the Act or Rule 3-19 of Regulation S-X if such financial
statements and information are contained in periodic reports filed with or furnished to the Commission by the Registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
|
|
|
|
|
(5)
|
That,
for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
|
|
(i)
|
If
the registrant is relying on Rule 430B:
|
|
(a)
|
Each
prospectus filed by the registrant pursuant to Rule 424(b)(3) shall be deemed to be part of the registration statement as
of the date the filed prospectus was deemed part of and included in the registration statement; and
|
|
(b)
|
Each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance
on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement
as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract
of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the
issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration
statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement
made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated
or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement
will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that
was made in the registration statement or prospectus that was part of the registration statement or made in any such document
immediately prior to such effective date; or
|
|
(ii)
|
If
the registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement
relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance
on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after
effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus
that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use,
supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first use.
|
|
(6)
|
That,
for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial
distribution of the securities: The undersigned registrant undertakes that in a primary offering of securities of the undersigned
registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the
purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned
registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
|
|
(i)
|
Any
preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant
to Rule 424;
|
|
(ii)
|
Any
free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred
to by the undersigned registrant;
|
|
(iii)
|
The
portion of any other free writing prospectus relating to the offering containing material information about the undersigned
registrant or its securities provided by or on behalf of the undersigned registrant; and
|
|
(iv)
|
Any
other communication that is an offer in the offering made by the undersigned registrant to the purchaser.
|
|
(7)
|
The
undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933,
each filing of the registrant’s annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange
Act of 1934 (and, where applicable, each filing of an employee benefit plan’s annual report pursuant to section 15(d)
of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
|
|
|
|
|
(8)
|
The
undersigned registrant hereby undertakes to supplement the prospectus, after the expiration of the subscription period, to
set forth the results of the subscription offer, the transactions by the underwriters during the subscription period, the
amount of unsubscribed securities to be purchased by the underwriters, and the terms of any subsequent reoffering thereof.
If any public offering by the underwriters is to be made on terms differing from those set forth on the cover page of the
prospectus, a post-effective amendment will be filed to set forth the terms of such offering.
|
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in Beijing, People’s Republic of China, on August 22, 2019.
|
CHINA
INTERNET NATIONWIDE FINANIAL SERVICES, INC.
|
|
|
|
By:
|
/s/
Jianxin Lin
|
|
|
Jianxin
Lin
|
|
|
Chairman,
Director and Chief Executive Officer
|
|
|
(Principal
Executive Officer)
|
|
|
|
|
By:
|
/s/
Jinchi Xu
|
|
|
Jinchi
Xu
|
|
|
Chief
Financial Officer and Director
|
|
|
(Principal
Accounting Officer)
|
Pursuant
to the requirements of the Securities Act of 1933, as amended, this Registration Statement has been signed by the following persons
in the capacities and on the dates indicated.
Signature
|
|
Capacity
|
|
Date
|
|
|
|
|
|
/s/
Jianxin Lin
|
|
Chief
Executive Officer, Director
|
|
August
22, 2019
|
Jianxin
Lin
|
|
and Chairman of the Board
(Principal
Executive Officer)
|
|
|
|
|
|
|
|
/s/
Jinchi Xu
|
|
Chief
Financial Officer and Director
|
|
August
22, 2019
|
Jinchi
Xu
|
|
(Principal
Accounting Officer)
|
|
|
|
|
|
|
|
/s/
Sheve Li Tay
|
|
Director
|
|
August
22, 2019
|
Sheve
Li Tay
|
|
|
|
|
|
|
|
|
|
/s/
Hong Huang
|
|
Director
|
|
August
22, 2019
|
Hong
Huang
|
|
|
|
|
|
|
|
|
|
/s/
Buting Yang
|
|
Director
|
|
August
22, 2019
|
Buting
Yang
|
|
|
|
|
SIGNATURE
OF AUTHORIZED REPRESENTATIVE IN THE UNITED STATES
Pursuant
to the Securities Act of 1933 as amended, the undersigned, the duly authorized representative in the United States of America,
has signed this registration statement thereto in New York, NY on August 22, 2019.
|
By:
|
/s/
Benjamin Tan
|
|
|
Benjamin Tan
|
|
Title:
|
Authorized Representative in the United States
|
China Internet Nationwid... (NASDAQ:CIFS)
Historical Stock Chart
From Aug 2024 to Sep 2024
China Internet Nationwid... (NASDAQ:CIFS)
Historical Stock Chart
From Sep 2023 to Sep 2024